Exhibit 10.1
 
 
 
 
 

 
DATED
12 March 2008
         
LLOYDS TSB BANK PLC, NETHERLANDS BRANCH
AND BELGIUM BRANCH
(1)
 
LLOYDS TSB COMMERCIAL FINANCE LIMITED,
(2)
 
CIMCOOL EUROPE B.V.
(3)
 
CIMCOOL INDUSTRIAL PRODUCTS B.V.
(4)
 
D-M-E EUROPE CVBA
(5)
 
FERROMATIK MILACRON MASCHINENBAU GMBH
(6)
 
MILACRON KUNSTSTOFFMASCHINEN EUROPA GMBH
(7)
 
MILACRON B.V
(8)
 
And
   
MILACRON NEDERLAND B.V
(9)

 

 
 
ASSET BASED FINANCE AGREEMENT (“Agreement”)
 
 

 
 

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CONTENTS
 

 
1
INTERPRETATION
2
2
FACILITIES
2
3
FEES AND CHARGES
3
4
ASSIGNMENT, SYNDICATION AND PARTICIPATION
3
5
TERMINATION
4
6
PERMITTED TRANSACTION
4
7
NOTICES
5
8
STATUS OF AGREEMENT
7
9
COUNTERPARTS
7
10
GOVERNING LAW AND JURISDICTION
7
SCHEDULE 1 CONDITIONS PRECEDENT
8
SCHEDULE 2 SPECIAL CONDITIONS
9
SCHEDULE 3 DEFINITIONS
12
SCHEDULE 4 FORM OF COMPLIANCE CERTIFICATE
16
SCHEDULE 5 FORM OF WORKED EXAMPLE FOR FIXED CHARGE COVERAGE COVENANT
17

 

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DATE OF ASSET BASED FINANCE AGREEMENT
12 March 2008
 
PARTIES
 
(1)
LLOYDS TSB BANK PLC, a public limited company incorporated under the law of
England and Wales (Company Number 00002065) acting through its branch offices at
Staten Bolwerk 1, 2011 MK Haarlem, The Netherlands, which branch office is
registered with the Trade Register of the Chamber of Commerce (Kamer van
Koophandel) under number 33185396 (“Lloyds TSB Netherlands Branch”) and at 2
avenue de Tervueren, B-1040 Brussels registered with the register of legal
entities (kruispuntbank voor ondernemingen) under enterprise number 0448315291
(“Lloyds TSB Belgium Branch” and together with Lloyds TSB Netherlands Branch,
“Lloyds TSB”);
 
(2)
LLOYDS TSB COMMERCIAL FINANCE LIMITED, a private limited company incorporated
under the law of England and Wales (Company Number  00733011), with its
registered offices at Boston House, Little Green, Richmond, Surrey TW9 1QE
(“Lloyds TSB CF” and together with Lloyds TSB, the “Lenders”)
 
(3)
CIMCOOL EUROPE B.V., a private limited liability company (besloten vennootschap
met beperkte aansprakelijkheid) organised under the law of the Netherlands,
whose registered seat (statutaire zetel) is Vlaardingen, the Netherlands,
registered with the Chamber of Commerce of Rotterdam under number 24303473 and
having its office address at Schiedamsedijk 20, 3134 KK, Vlaardingen, the
Netherlands (“Cimcool Europe”);
 
(4)
CIMCOOL INDUSTRIAL PRODUCTS B.V., a private limited liability company (besloten
vennootschap met beperkte aansprakelijkheid) organised under the law of the
Netherlands, whose corporate seat is at Vlaardingen, registered with the Chamber
of Commerce under number  24212814 and having its office address at
Schiedamsedijk 20, 3134 KK, Vlaardingen, the Netherlands (“Cimcool Industrial”);
 
(5)
D-M-E EUROPE CVBA, a co-operative company (coöperatieve vennootschap) organised
and existing under the law of Belgium, having its registered office at
Industriepark Noord, Oude Baan 1, 2800 Mechelen and recorded with the register
of legal entities (kruispuntbank voor ondernemingen) under enterprise number
0456 932 455 (“D-M-E”);
 
(6)
FERROMATIK MILACRON MASCHINENBAU GMBH, a German company registered in the
commercial register of the Local Court Freiburg im Bresgau under HR B 260880,
having its business seat at Riegeler Straße 4, D-79364 Malterdingen
(“Ferromatik”);
 
(7)
MILACRON KUNSTSTOFFMASCHINEN EUROPA GMBH, a German company registered in the
commercial register of the Local Court Freiburg im Bresgau under HR B 260914,
having its business seat at Riegeler Straße 4, D-79364 Malterdingen (“MKE”);
 
(8)
MILACRON B.V. a private limited company (besloten vennootschap met beperkte
aansprakelijkheid) organised under the law of the Netherlands, having its
corporate seat in Vlaardingen, registered with the Chamber of Commerce under
number 24209768  and having its office address at Schiedamsedijk 20, 3134 KK,
Vlaardingen, the Netherlands; and
 

 
 
1

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(9)
MILACRON NEDERLAND B.V. a private limited company (besloten vennootschap met
beperkte aansprakelijkheid) organised under the law of the Netherlands, having
its corporate seat in Vlaardingen, registered with the Chamber of Commerce under
number 24280521 and having its office address at Schiedamsedijk 20, 3134 KK,
Vlaardingen, the Netherlands.

 
INTRODUCTION
 
A
Subject to the terms of this Agreement and the Financing Documents, the Lenders
shall make the Facilities available to the Clients.

 
B
The parties hereto wish to record their agreement on various issues relating to
the Facilities.

 
IT IS HEREWITH AGREED THAT:
 
1
INTERPRETATION

 
1.1
In this Agreement, capitalised terms (unless otherwise defined) shall have the
meaning given to them in Schedule 3.

 
1.2
References to clauses, paragraphs and schedules are to be construed, unless
otherwise stated, as references to clauses, paragraphs and schedules of this
Agreement and references to this Agreement include its schedules.

 
2
FACILITIES

 
2.1
Facilities Limit

 
The maximum aggregate amount to be made available to the Clients pursuant to the
Facilities (the “Facility Amount”) shall be twenty seven million euros
(€27,000,000) at any time outstanding on a revolving basis.
 
2.2
At the Commencement Date, the Property Facility Limit shall be an amount of
eleven million one hundred and sixty thousand euros (€11,160,000) and shall
thereafter reduce in equal quarterly amounts of two hundred and seventy nine
thousand euros (€279,000). The Facility Amount shall remain constant regardless
of such reduction of the Property Facility Limit.

 
2.3
For the avoidance of doubt, the Aggregate Debt Financing Limit shall be the
Facility Amount less the Property Facility Limit from time to time.

 
2.4
All of the Facilities must be finally repaid on the date (the “Final Repayment
Date”) falling five years after the Commencement Date.

 
2.5
Purpose

 
The proceeds of the Facilities shall be used solely:
 
 
(a)
to finance working capital needs of the Clients, including to refinance existing
credit commitments of any of the Clients; and

 
 
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(b)
to finance working capital needs of affiliates of the Clients, including through
dividends, distributions, intercompany loans, repayment of intercompany loans
and similar intragroup transactions.

 
3
FEES AND CHARGES

 
3.1
Service Charge

 
During the course of the Facilities, the Clients shall pay to the Lenders,
monthly in arrears, a service charge of Euro 10,500 in aggregate per calendar
month with the Clients jointly and severally liable for such charge.
 
3.2
Arrangement Fee

 
The Clients shall pay to the Lenders on the Commencement Date an arrangement fee
of 0.5% of the Facility Amount in aggregate with the Clients jointly and
severally liable for such fee.
 
3.3
Unused Line Fee

 
During the course of the Facilities, the Clients shall pay to the Lenders each
month, in aggregate, an unused line fee of 0.25% per annum on the average of the
daily unused amounts of the Facility Amount, in respect of the previous month.
 
4
ASSIGNMENT, SYNDICATION AND PARTICIPATION

 
4.1
The Lenders  shall underwrite 100% of the Facilities but after the Commencement
Date may assign, or grant participations in, up to 49 % of the Facility Amount
to third parties, subject to the prior written consent of Milacron B.V. as to
the proposed participants or assignees (with such consent not to be unreasonably
withheld) and subject to compliance with the provision of clause 4.2.

 
4.2
The terms of any participation or assignment granted pursuant to clause 4.1
shall be void unless it is subject to terms preventing any assignee or new
participant (whether direct or indirect) from assigning or granting
participations in any of its rights or obligations under the Facilities without
the prior written consent of Milacron B.V., with such consent not to be
unreasonably withheld.

 
4.3
The Clients may only assign claims and rights under this Agreement or any of the
Facilities or the Financing Documents, or respectively, encumber such claims
with the rights of third parties with the prior written approval of  the
Lenders, which shall not be unreasonably withheld.

 
4.4
Market Flex

 
If the Lenders acting in good faith are unable to achieve a Successful
Syndication of the Facilities in accordance with the terms of this clause 4.4
then the Lenders shall be entitled (after consultation with the Clients and
after demonstrating that reasonable endeavours have been used to syndicate the
Facilities successfully) to increase the Margin in respect of each of the
Facilities by a maximum of 0.5%.
 
 
3

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5
TERMINATION

 
5.1
Subject to clause 5.2 if the Facilities are terminated for any reason prior to
the second anniversary of the Commencement Date, the Clients shall pay, on a
joint and several basis, an early termination fee of 1% of the Facility Amount
in aggregate to the Lenders.

 
5.2
The provisions of clause 5.1 will not apply in the event that the Lenders
terminate the Facilities in accordance with the terms of the Financing
Documents:

 
 
(a)
because it becomes unlawful in any jurisdiction for Lloyds TSB or Lloyds TSB CF
to perform any of their obligations contemplated by the Finance Documents or
fund or maintain the Facilities; and/or

 
 
(b)
because a material adverse change in the Tax regime applicable to Lloyds TSB or
Lloyds TSB CF occurs (where such material adverse change is not attributable to
the wilful misconduct or gross negligence of the Lenders).

 
For the avoidance of doubt, the Lenders do not have any right to terminate the
Facilities for a material adverse change in the Tax regime if the Clients at
their discretion pay an amount to the Lenders equal to the amount required to
put the Lenders in the position that they would have been if such material
adverse change had not occurred.  The Lenders and the Clients agree that if such
a material adverse change in the Tax regime occurs and following payment by the
Clients to the Lenders of such aforementioned amount, the Lenders receive more
than the amount they would have received in the absence of such a material
adverse change in the Tax regime (whether because of a subsequent change in the
Tax regime or otherwise), the Lenders will refund to the Clients the excess
amount.
 
5.3
At any time after the second anniversary of the Commencement Date, the Clients
may terminate the Facilities by giving at least 3 months notice to the Lenders
or at the Clients’ sole discretion, by the Clients paying the Lenders the sum of
US$200,000 (or the equivalent amount in Euro as at the date of payment) in
aggregate to terminate the Facilities immediately at any time.

 
5.4
Termination of any of the Facilities will cause all other Facilities to be
terminated simultaneously.

 
6
PERMITTED TRANSACTION

 
6.1
It is the Clients’ intention that, within six months of the date of this
Agreement, Ferromatik and MKE will merge into MKE.  Nothwithstanding the
provisions of any of the Financing Documents, the Lenders agree to such merger
and the Clients agree to consult with the Lenders as soon as reasonably
practicable prior to such merger to ensure that, so far as possible, the
Lenders’ rights under the Facilities are not and will not be materially
prejudiced by such merger.

 
6.2
Milacron B.V. agrees that immediately upon completion of the merger referred to
in clause 6.1 above it will enter into a deed of pledge for the purpose of
creating a right of pledge over the shares in the company resulting from such
merger.

 
 
4

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7
NOTICES

 
7.1
All notices or other communications in connection with this Agreement shall be
given in writing. The address, email address and fax number of each party for
all notices under this Agreement are those specified below (or such other
address, email address or fax number as notified by that party by not less than
five business days’ prior notice):

 

 
(a)
Address of Lloyds TSB Netherlands Branch:
         
Staten Bolwerk 1
2011 MK Haarlem
The Netherlands
 
   
Attention:
Loans Administration Department
       
Mrs. Claudia Van der Meer
               
Tel:
003123 5168849
     
Fax:
0031 23 5517164
     
E-mail:
Claudia.van.der.Meer@Lloydstsb.nl
       
(b)
Address of Lloyds TSB Belgium Branch:
         
2 avenue de Tervueren
B-1040 Brussels
Belgium
 
   
Attention:
Loans Administration Department
       
Mr. Baudoin Benfante
               
Tel:
+ 32 2 739 59 01
     
Fax:
+ 32 2 733 04 64
     
E-mail:
baudouin.benfante@lloydstsb.be
           
Address of Lloyds TSB CF:
           
Niederlassung Deutschland
   
Gütersloher Str. 123
Moltkeplatz 61
   
D-33415 Verl
45138 Essen
   
Germany
Germany
               
Attention:
Mr. Ralf Bauer
       
Managing Director
               
Tel:
+49 201 437818 800
   
Fax:
+49 201 437818 818
   
E-mail:
Ralf.Bauer@ltsbcf.com
       
(c)
Address of Cimcool Europe B.V.:
         
Schiedamsedijk 20
3134 KK, Vlaardingen
The Netherlands
           
Attention:
René van Geemen
   
Tel:
+31 10 445 0067
+31 10 460 4706
   
Fax:
   
E-mail:
vangeemen.rene@cimcool.net
     

 
 
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(d)
Address of Cimcool Industrial Products B.V.:
         
Schiedamsedijk 20
3134 KK, Vlaardingen
The Netherlands
           
Attention:
René van Geemen
           
Tel:
+31 10 445 0067
   
Fax:
+31 10 460 4706
   
E-mail:
vangeemen.rene@cimcool.net
       
(f)
Address of D-M-E Europe CVBA:
         
Industriepark Noord G1
Oude Baan 1
B-2800 Mechelen, Belgium
           
Attention:
Katja Thoelen
           
Tel:
+32 152 150 51
   
Fax:
+32 154 051 51
   
E-mail:
katja_thoelen@dmeeu.com
       
(g)
Address of Ferromatik Milacron Maschinenbau GmbH:
         
Riegeler Strasse 4
D-79364 Malterdingen
Germany
           
Attention:
Albrecht Mehliss
           
Tel:
+49 764 478 243
   
Fax:
+49 764 478 422
   
E-mail:
albrecht_mehliss@ferromatik.com
       
(h)
Address of Milacron Kunststoffmaschinen Europa GmbH:
         
Riegeler Strasse 4
D-79364 Malterdingen
Germany
           
Attention:
Albrecht Mehliss
           
Tel:
+49 764 478 243
   
Fax:
+49 764 478 422
   
E-mail:
albrecht_mehliss@ferromatik.com
     

 
 
6

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(i)
Address of Milacron B.V.:
         
Schiedamsedijk 20
3134 KK, Vlaardingen
The Netherlands
           
Attention:
Gerard van Deventer
           
Tel:
+31 104 450 055
   
Fax:
+31 104 450 056
   
E-mail:
gerard_vandeventer@milacron.com
       
(j)
Address of Milacron Nederland B.V.:
         
Schiedamsedijk 20
3134 KK, Vlaardingen
The Netherlands
             
Attention:
René van Geemen
             
Tel:
+31 10 445 0067
   
Fax:
+31 10 460 4706
   
E-mail:
vangeemen.rene@cimcool.net

 
8
STATUS OF AGREEMENT

 
8.1
Once executed, this Agreement, together with the Financing Documents and any
security document entered into in connection therewith, includes all terms
agreed between the Lenders, the Clients and the Guarantors in connection with
the provision of the Facilities to the exclusion of any representations and
statements made by either of Lloyds TSB or Lloyds TSB CF or any of the Clients
or Guarantors or on behalf of any of them whether orally or in writing prior to
the date of this Agreement.

 
8.2
In the event of any inconsistency between the terms of any of the Financing
Documents and this Agreement, the terms of this Agreement shall prevail.

 
9
COUNTERPARTS

 
This Agreement may be executed in any number of counterparts and by different
parties on separate counterparts each of which, when executed and delivered,
shall constitute an original and all the counterparts together shall constitute
but one and the same agreement.
 
10
GOVERNING LAW AND JURISDICTION

 
10.1
This Agreement is governed by the law of the Netherlands.

 
10.2
The competent courts of Amsterdam, The Netherlands shall have exclusive
jurisdiction with regard to disputes in connection with this Agreement.

 

7

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SCHEDULE 1
 
CONDITIONS PRECEDENT
 
Before making the Facilities available to the Clients, in addition to the
conditions precedent set out in the Financing Documents, the Lenders require the
following conditions precedent to be satisfied on terms satisfactory to the
Lenders:
 
1
GENERAL

 
1.1
In respect of each Client (and the directors and shareholders of such entities),
the Lenders being satisfied with the results of the LTSB “Know Your Customer”
(anti-money laundering) checks and procedures concerning such persons, as
required by the Lenders’ policies and/or by applicable laws or regulations.

 
1.2
The Clients have provided evidence satisfactory to the Lenders that Opening
Capital Employed at the Commencement Date is substantially in line with the
information provided to the Lenders, after adjustment for any repatriation to
the Clients’ affiliated entities in the United States pursuant to Conditions 1.6
and 1.7 of Schedule 2.

 
1.3
The excess Availability as at the Commencement Date shall be no less than €7
million (including without limitation the Permanent Headroom Block and taking
into account sub-limits and reserves, payment of fees and expenses of the
transaction, the application of the proceeds of the initial debtors, purchases
and loans, and after deduction for obligations overdue beyond the historical and
ordinary course of dealings).

 
1.4
At or immediately before the Commencement Date, trade creditors of the Clients
must be at a level and in a condition reasonably satisfactory to the Lenders.

 
1.5
Completion and signing of the Financing Documents and all legal documentation in
relation thereof, in a form satisfactory to the Lenders.

 
2
LEGAL OPINION

 
Legal opinion addressed and satisfactory to the Lenders from Cravath, Swaine &
Moore LLP confirming that the Financing Documents and related security
documentation entered into between the Clients and Lloyds TSB and/or Lloyds TSB
CF, as the case may be, do not breach the express provisions of the U.S.
Facility Documentation, subject to customary limitations and assumptions,
including as to the customary nature of the terms of the Financing Documents. In
view of the assumptions included in such legal opinion, each of the Clients
represents and warrants to the Lenders that each Client is a “Foreign Restricted
Subsidiary” as defined in the Parent Indenture and a “Foreign Subsidiary” as
defined in the Parent Credit Agreement and no Client is a “Guarantor” as defined
in the Parent Indenture or a “Credit Party” as defined in the Parent Credit
Agreement.
 
 
8

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SCHEDULE 2
 
SPECIAL CONDITIONS
 
In addition to the conditions set out in the Financing Documents, the following
special conditions apply:
 
1
OPERATING CONDITIONS

 
1.1
The Clients shall keep the Lenders satisfied that goods, which are or shall be
assigned or security assigned to the Lenders, remain covered by insurance during
transportation by delivering to the Lenders on or promptly following the
Commencement Date, and upon annual renewal, copies of all relevant policies of
insurance entered into with reputable insurers, which policies shall be up to
date and in full force and effect.

 
1.2
Following a Termination Event (as defined in the Financing Documents), none of
the Clients and the Guarantors shall repatriate any funds to any of the Clients’
affiliated entities in the United States, without the prior consent of the
Lenders.

 
1.3
The aggregate borrowing under the Financing Documents shall never exceed 150% of
the combined gross receivable ledger balances of the Clients at any time.

 
1.4
In the event of the requirement for an Administrative Agent to be appointed
pursuant to a Successful Syndication, the Lenders will require an agreement
customary for that arrangement.

 
1.5
The Lenders shall apply a Permanent Headroom Block of €2 million against total
Availability.

 
1.6
None of the Clients and the Guarantors shall repatriate any funds to the
Clients’ affiliated entities in the United States which would result in more
than (the Euro equivalent of) US$25,000,000 of the aggregate of the funds
initially made available by the Lenders to the Clients pursuant to all the
Financing Documents being repatriated to the Clients’ affiliated entities in the
United States.

 
1.7
In relation to repatriation of funds to the United States in excess of the limit
referred to in Condition 1.6 above, the Clients and Guarantors may repatriate
further funds to any of their United States affiliated entities, provided that
pro forma repatriation, Milacron B.V. will procure that a headroom of €7 million
(including the Permanent Headroom Block) is maintained based on 6 months
projections for the European Group and that the Clients are satisfied that such
headroom is sufficient to cover their working capital requirements over that 6
months period. The Lenders are to be advised of such further proposed
repatriations and, if requested by the Lenders, Milacron B.V. will provide the
Lenders with a 6 month cashflow forecast in respect of the European Group.

 
2
FINANCIAL AND OTHER COVENANTS

 
2.1
Fixed Charge Coverage Covenant:

 
So long as the Facilities remain outstanding, Milacron B.V. shall procure that
the ratio of EBITDA to Total Fixed Charges in respect of the European Group is
maintained for each Review Period at a minimum of 1:1.
 
 
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2.2
Compliance

 
 
(a)
On each Test Date, Milacron B.V. shall deliver to the Lenders a Compliance
Certificate (in substantially the form set out in Schedule 4 to this Agreement)
showing compliance with the financial covenant set out in Schedule 2, Condition
2.1 for the relevant Review Period.

 
 
(b)
The EBITDA and Total Fixed Charges in respect of each Review Period (all as
referred to in the financial covenant set out in Schedule 2, Condition 2.1)
shall be determined by reference to the consolidated financial statements duly
applying U.S. GAAP of Milacron B.V. for the relevant Review Period (and in the
case of the first Review Period, by reference to the most recent two quarters’
consolidated financial statements of Milacron B.V. as at 30 June 2008) and in
each case shall be prepared on a basis consistent with the financial projections
provided by the Clients to the Lenders in the electronic data room established
by DLA Piper UK LLP prior to the date of this Agreement.  For the avoidance of
doubt a worked example is included herewith in Schedule 5.

 
2.3
Debt Turn and Dilution Rate Covenants

 
 
(a)
At all times during the life of the Facilities, the Debt Turn shall not exceed
(i) 80 days in respect of Ferromatik, (ii) 85 days in respect of the Cimcool
Europe, (iii) 60 days in respect of Cimcool Industrial and (iii) 80 days in
respect of D-M-E.

 
 
(b)
At all times during the life of the Facilities, the Dilution Rate shall not
exceed (i) 6% in respect of Ferromatik, (ii) 2% in respect of Cimcool Europe and
Cimcool Industrial and (iii) 6% in respect of D-M-E.

 
 
(c)
The Debt Turn and Dilution Rate covenants set out in Schedule 2, Conditions 2.3
(a) and (b) above shall be measured by the Lenders on the last Working Day of
each successive calendar month commencing on the last Working Day of March 2008
and the Lenders may, at their discretion acting reasonably, ignore for the
purpose of any such measurement, any anomalous or exceptional item, event or
circumstance by virtue of it having arisen otherwise than as a result of an
actual and genuine deterioration of the debt portfolio. Failure to comply with
the Debt Turn and Dilution Rate covenants shall not constitute and does not
result in an event of default or Termination Event under the Facilities but the
Lenders (acting reasonably and in good faith) shall be entitled to make a
proportionate and commensurate reserve against Availability to reflect the
increased risk associated with such non-compliance..

 
3
OTHER PROVISIONS

 
3.1
In the event that Lloyds TSB or Lloyds TSB CF are to provide a guarantee or a
Letter of Credit (reserved against available funding) on behalf of a Client, a
monthly fee will be charged at the rate equal to the margin charged for that
month. Such fee does not include the issuer’s normal charges.

 
3.2
The Lenders may charge reasonable fees/expenses where it is reasonably necessary
to delegate any of its functions as agent, security trustee, or where an
exceptional workload is involved. Such fees are to be agreed with the Clients
before being incurred.

 
 
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3.3
The Clients shall pay to the Lenders, promptly upon the Lenders’ requests in
accordance with fees estimates provided to, or actual costs properly incurred
by, the Lenders, all reasonable out-of-pocket legal and closing expenses
properly incurred in connection with the provision of the Facilities, including
legal fees and disbursements, filing and search fees, appraisal fees,
environmental fees and field examination expenses, customary administration
expenses of the Lenders and daily field administration charges, in each case
with any applicable VAT, provided that the Lenders agree to pay (or reimburse
the Clients for) the amount of any, notarisation, filing and registration fees
and duties in Belgium over the amount of ten thousand euros (€10,000).

 
The parties hereto intend that the terms and provisions of this Agreement, the
Financing Documents and the related security documentation be, and shall be
interpreted to be, consistent in all respects with the terms and provisions of
the U.S. Facility Documentation.  The parties hereto acknowledge that it shall
not be the responsibility of the Lenders to ensure compliance with the terms and
provisions of the U.S. Facility Documentation.
 

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SCHEDULE 3

 
DEFINITIONS
 
The following words shall have the following meaning when used in this
Agreement:
 
“Administrative Agent” means a legal entity appointed to administer all or any
of the Debt Financing Agreements and/or the Property Facility, pursuant to a
Successful Syndication.
 
“affiliate” means, in relation to any person, a subsidiary of that person or a
holding company of that person or any other subsidiary of that holding company.
 
“Aggregate Debt Financing Limit” means the maximum aggregate amount to be made
available to the Clients pursuant to the Debt Financing Agreements at any one
time.
 
“Availability” means any positive balance of the aggregate of the value of
Eligible Debt and the value of the German Property minus the aggregate of all
outstanding loan amounts advanced and debts purchased under the Financing
Documents.
 
“Belgian Receivables Finance Agreement” means the receivables finance agreement
dated on or about the date of this Agreement between Lloyds TSB Belgium Branch
and D-M-E.
 
“Capital Expenditure” means all net cash payments for fixed assets or
improvements replacements, substitutions or additions thereto having a useful
life or remaining useful life of more than one year and that are required to be
capitalised under U.S. GAAP.
 
“Clients” means each of Cimcool Europe, Cimcool Industrial, D-M-E and
Ferromatik.
 
“Commencement Date” means 12 March 2008.
 
“Debt Finance Facility” means the revolving facilities to be made available to
the Clients under the terms of the Debt Financing Agreements.
 
“Debt Financing Agreement” means any of the Dutch Receivables Finance
Agreements, the Belgian Receivables Finance Agreement and the German Debt
Purchase Agreement.
 
“Debt Turn” means in relation to any assigned or pledged debt, the number of
days (when measured on a cash collection basis), being the result of dividing
the aggregate of the end of calendar monthly debtor balances in a relevant
jurisdiction by net sales for that calendar month and multiplying the result by
30.5.
 
“Dilution Rate” means the average over a period of twelve months (calculated on
a rolling basis) of the face value of credit notes and non-cash credits, write
offs and other adjustments issued by a Client in a relevant jurisdiction in
respect of assigned or pledged debts which are notified to Lloyds TSB or Lloyds
TSB CF, the effect of which is to reduce the value of such assigned or pledged
debts, expressed as a percentage of the face value of all assigned or pledged
debts over such twelve months period.
 
“Dutch Receivables Finance Agreements” means each of the receivables finance
agreements dated on or about the date of this Agreement made between Lloyds TSB
Netherlands Branch and Cimcool Europe and between Lloyds TSB Netherlands Branch
and Cimcool Industrial.
 
 
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“EBITDA” means, for any Review Period, the consolidated operating profit of the
European Group for that Review Period, as shown in the consolidated accounts for
the Review Period before:
 
 
(a)
extraordinary and exceptional items;

 
 
(b)
provision for Taxation;

 
 
(c)
provision for amortisation and depreciation (including provision for write-down
of assets); and

 
 
(d)
Net Interest Expense.

 
“Eligible Debt” means any debt which is (i) an Approved Invoice as defined in
the Dutch Receivables Finance Agreements or the Belgian Receivables Finance
Agreement, or (ii) an Approved Receivable as defined in the German Debt Purchase
Agreement.
 
“EURIBOR” means the one month interbank rate offered in Euro displayed on
Reuters screen page EURIBOR 01 or, if such page is replaced or Reuters screen
service ceases to be available, such rate as displayed on such other page or
service specified by the Lenders, after consultation with the Clients.
 
“European Group” means Milacron B.V and its direct and indirect subsidiaries.
 
“Facilities” means the Property Facility and the Debt Finance Facility.
 
“Financing Documents” means the Debt Financing Agreements and the Property
Facility Agreement.
 
“Fixed Charge Coverage ratio” means the ratio set out in Schedule 2, Condition
2.1 of this Agreement.
 
“German Debt Purchase Agreement” means the debt purchase agreement dated on or
about the date hereof between Ferromatik (as “Seller”) and Lloyds TSB CF.
 
“German Property” means the real estate property owned by Ferromatik registered
with the land register of Malterdingen kept at the local court of Emmendingen,
folio 55, parcels 6561 and 6562 of the map 183.21 and parcels 6607/1, 6607/2 and
4698/6 of the map 184.21.
 
“Guarantors” means each of the Clients, Milacron B.V., Milacron Nederland B.V.
and MKE.
 
“Lenders” means Lloyds TSB and Lloyds TSB CF together.
 
“Lenders’ Cost of Funds” means the EURIBOR rate as notified by the Lenders to
the Clients.
 
“Margin” means 1.75 per cent. per annum over the Lenders’ Cost of Funds in
respect of the Debt Finance Facility and 2.00 per cent. per annum over the
Lenders’ Cost of Funds in respect of the Property Facility.
 
“Net Interest Expense” means the aggregate of interest paid in cash by members
of the European Group on borrowings during the Review Period less the aggregate
of interest receivable in cash by members of the European Group during the
Review Period.
 
“Opening Capital Employed” means total capital plus retained earnings plus or
minus and currency translation adjustments of the European Group.
 
 
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“Parent Credit Agreement” means the credit agreement dated as of 19 December
2006 (as amended, supplemented or otherwise modified heretofore) by and among
Milacron Inc. and each of the other borrowers signatory thereto, as borrowers,
certain other subsidiaries of Milacron Inc. signatory thereto, as credit
parties, the lenders signatory thereto from time to time and General Electric
Capital Corporation, as administrative agent.
 
“Parent Indenture” means the Indenture dated as of 26 May 2004 (as amended,
supplemented or otherwise modified heretofore) by and among U.S Bank National
Association, as trustee, Milacron Inc. (successor by merger to Milacron Escrow
Corporation) as issuer, and the guarantors party thereto, relating to the 11 ½%
senior secured notes due 2011.
 
“Permanent Headroom Block” means an excess of Availability in the amount of two
million euros (€2,000,000) to be maintained throughout the term of the Financing
Documents.
 
“Property Facility” means a revolving facility to be made available to
Ferromatik under the terms of the Property Facility Agreement.
 
“Property Facility Agreement” means the agreement dated on or about the date
hereof between Lloyds TSB Netherlands Branch and Ferromatik pursuant to which
Lloyds TSB Netherlands Branch will make the Property Facility available to
Ferromatik.
 
“Property Facility Limit” means the maximum amount to be made available under
the Property Facility at any one time.
 
“Review Period” means the most recent two financial quarters of Milacron B.V. as
at the relevant Test Date.
 
“subsidiary” means an entity in which a person:
 
(i)
holds beneficially (directly or indirectly) more than 50% of the issued share
capital (or similar rights of ownership); or

 
(ii)
holds beneficially (directly or indirectly) the right to control the composition
of the majority of its board of directors (or equivalent body) or controls the
majority of the voting rights, in each case, whether through the ownership of
voting capital or by contract.

 
For the avoidance of doubt, a person will not have “control” as specified in
paragraph (ii) above where that person has joint control.
 
“Successful Syndication” means the Lenders transferring participations and
commitments in the Facilities to other banks and financial institutions approved
by the Clients so that it has assigned or granted participations in 49% of the
Facility Amount;
 
“Tax” or “Taxation” means any form of taxation and duty, impost or tariff in
each case in the nature of taxation assessable on a Lender in any jurisdiction
(including, for the avoidance of doubt, any jurisdiction in which the Lender is
resident, established or acts through a branch office).
 
“Termination Event” has the meaning given to such term in the Dutch Receivables
Finance Agreements.
 
 
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“Test Date” means a date falling no more than two calendar months after the end
of each financial quarter and the first Test Date shall be no later than two
calendar months after 30 June 2008.
 
“Total Fixed Charges” means, for a Review Period, the aggregate of:
 
 
(a)
Net Interest Expense;

 
 
(b)
Capital Expenditure incurred by the European Group during the Review Period;

 
 
(c)
all scheduled repayments of principal under the terms of any external borrowings
of the European Group falling due during the Review Period, excluding repayments
of principal of any borrowings from affiliates of any member of the European
Group falling due in the Review Period and excluding repayments pursuant to the
Facilities; and

 
 
(d)
all cash distributions, dividends and other permitted returns of capital paid
during the Review Period but excluding any repatriation of funds (by loans or
any other means) directly or indirectly to Milacron Inc. or any of its
non-European subsidiaries and excluding any distributions or cash payments made
in the ordinary course of business pursuant to contractual obligations.

 
“U.S. Facility Documentation” means the Parent Credit Agreement and the Parent
Indenture.
 
“U.S. GAAP” means generally accepted accounting principles in the United States
applied from time to time.
 
“Working Day” means a day (other than a Saturday or a Sunday) on which
commercial banks are open for general business in Amsterdam, Frankfurt, Brussels
and London.
 
 
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SCHEDULE 4

 
FORM OF COMPLIANCE CERTIFICATE
 
To:           The Lenders
 
From:        Milacron B.V.
 

 
Dated:
 

 
Dear Sirs
 
Asset Based Finance Agreement dated  [·] March 2008 (the “ABFA”) : Financial
Covenants etc.
 
1 
We refer to the ABFA.  This is a compliance certificate.  Terms defined in the
ABFA have the same meaning in this compliance certificate.

 
1 
We confirm that, based on the information attached to this certificate, which we
hereby certify to be true, complete and accurate:

 
 
●
The Fixed Charge Coverage ratio set out in Schedule 2, Condition 2.1 of the ABFA
is at a minimum of 1:1; and

 
 
●
We confirm that no Termination Event is continuing under the Financing
Documents.

 

 

 

Signed:  …………………………….        Director of Milacron B.V. 

 
 
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SCHEDULE 5
 
FORM OF WORKED EXAMPLE FOR FIXED CHARGE COVERAGE COVENANT
 

17

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This Agreement has been duly executed and signed by the representatives of the
parties as set out below.
 
 

 
LLOYDS TSB BANK PLC,
NETHERLANDS BRANCH
)
     
)
 
acting by
Mark Louman
)
/s/ Mark Louman
 
Head of Finance, Northern Europe
)
Authorised signatory
   
)
 
and by
Claudia Roswitha van der Meer
)
/s/ Claudia Roswitha van der Meer
 
Manager Loans & Legal
)
Authorised signatory
 
Consultant
           
LLOYDS TSB BANK PLC,
BELGIUM BRANCH
)
     
)
 
acting by
Baudouin Benfante
)
/s/ Baudouin Benfante
 
Manager, Finance and Loans
)
Authorised signatory
 
Administration Department
)
         
and by
Luc Vanleeuwe
)
/s/ Luc Vanleeuwe
 
Manager, Wholesale Banking
)
Authorised signatory
               
LLOYDS TSB COMMERCIAL FINANCE LIMITED,
   
)
 
acting by
Ralf Bauer
)
/s/ Ralf Bauer
 
Permanent Representative
)
Authorised signatory
   
)
 
and by
Robert James Eddowes
)
/s/ Robert James Eddowes
 
Permanent Representative
)
Authorised signatory
               
CIMCOOL EUROPE B.V.
)
     
)
 
acting by
Bart Joosen
)
/s/ Bart Joosen
 
Proxyholder
)
Authorised signatory
               
CIMCOOL INDUSTRIAL PRODUCTS B.V.
)
     
)
 
acting by
Bart Joosen
)
/s/ Bart Joosen
 
Proxyholder
)
Authorised signatory
                       

 
 
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D-M-E EUROPE CVBA
)
     
)
 
acting by
Gerardus van Deventer
)
/s/ Gerardus van Deventer
 
Managing Director
)
Authorised signatory
                       
FERROMATIK MILACRON MACHINENBAU
)
 
GMBH
 
)
     
)
 
acting by
Guy Moillet
)
/s/ Guy Moillet
 
Managing Director
)
Authorised signatory
                       
MILACRON KUNSTSTOFFMASCHINEN
)
 
EUROPA GMBH
)
     
)
 
acting by
Albrecht Mehliss
)
/s/ Albrecht Mehliss
 
Managing Director
)
Authorised signatory
               
MILACRON B.V.
)
     
)
 
acting by
Gerardus van Deventer
)
/s/ Gerardus van Deventer
 
Managing Director
)
Authorised signatory
               
MILACRON NETHERLANDS B.V.
)
     
)
 
acting by
Bart Joosen
)
/s/ Bart Joosen
 
Proxyholder
)
Authorised signatory
       

18
 

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