LIMITED WAIVER AND FIFTH AMENDMENT TO FINANCING AGREEMENT
Exhibit
10.1
LIMITED
WAIVER AND FIFTH AMENDMENT
LIMITED
WAIVER AND FIFTH AMENDMENT TO FINANCING AGREEMENT, dated as of February 10,
2006
(this “Amendment”),
among
Milacron Inc., a Delaware corporation (“Milacron”),
each
subsidiary of Milacron listed as a borrower or a guarantor on the signature
pages thereto, the Lenders party thereto, JPMorgan Chase Bank, National
Association, as administrative agent and collateral agent for the Lenders (in
each such capacity, together with its successors in each such capacity, the
“Administrative
Agent”
and
“Collateral
Agent”,
respectively and, collectively, the “Agents”).
W I T N E S S E T H:
WHEREAS,
Milacron, certain subsidiaries of Milacron, the Lenders named therein, the
Agents and the other parties thereto have entered into that certain Financing
Agreement, dated as of June 10, 2004 (as amended, supplemented or otherwise
modified from time to time, the “Financing
Agreement”;
capitalized
terms used herein but not otherwise defined herein shall have the meanings
given
such terms in the Financing Agreement);
and
WHEREAS,
the Loan Parties have requested that the Lenders and the Agents provide certain
waivers under the Financing Agreement, and the Lenders and the Agents are
willing to provide such waivers on the terms and subject to the conditions
set
forth herein.
WHEREAS,
the Loan Parties have requested that the Lenders and the Agents amend certain
provisions of the Financing Agreement, and the Lenders and the Agents are
willing to amend such provisions to the Financing Agreement on the terms and
subject to the conditions set forth herein.
NOW,
THEREFORE, in consideration of the premises and the agreements herein contained,
each of the Loan Parties, the Lenders, and the Agents hereby agree as
follows:
ARTICLE
I
AMENDMENTS
Section
1.1 Amendments
to Definitions.
As of
the Fifth Amendment Effective Date (as defined below), Section 1.01 of the
Financing Agreement is hereby amended by:
(a)
inserting the following new definitions in the proper alphabetical order
therein:
“Covenant
Condition”
means
the condition that, with respect to any Test Date, average daily Availability
(net of the Availability Reserve) is less than $17,500,000 for the period of
seven (7) consecutive Business Days commencing on such Test Date (unless the
Testing Release Condition has been met on or prior to the last Business Day
of
such period); provided
that,
with respect to (x) any Test Date for which a regularly scheduled semi-annual
interest payment on the Senior Secured Notes is paid by the Borrowers during
the
seven
(7)
Business Day period commencing on such Test Date, and (y) any Test Date
occurring during the seven (7) Business Day period commencing on the date
of any such interest payment, “Covenant
Condition”
shall
mean with respect to such Test Date the condition that (i) average daily
Availability (net of the Availability Reserve) is less than $17,500,000 for
the
period of fourteen (14) consecutive Business Days commencing on such Test Date
(unless the Testing Release Condition has been met on or prior to the last
Business Day of such period) or (ii) Availability (net of the Availability
Reserve) is less than $13,500,000 at any time during the period of fourteen
(14)
consecutive Business Days commencing on such Test Date.
“Covenant
Release Condition”
means
the condition that average daily Availability (net of the Availability Reserve)
shall have been greater than $17,500,000 for a period of thirty (30) consecutive
Business Days.
“Fifth
Amendment”
means
the Limited Waiver and Fifth Amendment to Financing Agreement, dated as of
February 10, 2006, among the Parent, each subsidiary of the Parent listed as
a
borrower or a guarantor on the signature pages thereto, the Lenders party
thereto, and the Agents.
“Fifth
Amendment Effective Date”
has
the
meaning set forth in the Fifth Amendment.
“Test
Date”
means
any Business Day that Availability (net of the Availability Reserve) is less
than $17,500,000 and any Business Day thereafter (until the Testing Release
Condition has been met); provided
that, no
Business Day during which the Covenant Condition is in effect (meaning the
period from an occurrence of the Covenant Condition until the occurrence of
the
Covenant Release Condition) shall be a Test Date unless such Business Day occurs
during the period of seven (7) consecutive Business Days immediately prior
to
and including the date of occurrence of the Covenant Release
Condition.
“Testing
Release Condition”
means
the condition that daily Availability (net of the Availability Reserve) shall
have been at least $17,500,000 on each Business Day for a period of seven (7)
consecutive Business Days.
(b) amending
the definition of “Consolidated EBITDA” by inserting the following new sentence
at the end thereof: “For purposes only of calculating Consolidated EBITDA for
the twelve calendar month testing period ending December 31, 2005, non-cash
charges arising during such period from reserves recorded in accordance with
GAAP in connection with the Loan Parties' captive insurance program with
Milacron Assurance shall also be added (without duplication) to Consolidated
EBITDA for such period.”
Section
1.2 Amended
Investments Covenant.
As of
the Fifth Amendment Effective Date, Section 7.02(e)(xii) of the Financing
Agreement is hereby amended by (a) deleting the word “and” appearing at the end
of clause (A) thereof and (b) deleting the comma at the end of clause (B)
thereof and inserting the following new text in lieu thereof:
;
and (C)
investments in China JV by any Loan Party in an aggregate amount not exceeding
$2,000,000 (it being understood and agreed that investments pursuant to this
clause (C) will not be considered "investments" by a Loan Party for
purposes
of clause (A) above, and it being further understood that, as of the Fifth
Amendment Effective Date, the full amount of investments permitted to be made
pursuant to clause (A) above involving, requiring, resulting in or otherwise
obligating any cash or cash consideration made or to be made by the Loan Parties
(including Milacron Plastics Technologies Group Inc.) has previously been
utilized),
Section
1.3 Amended
Limitation
on Issuance of Capital Stock Covenant.
As of
the Fifth Amendment Effective Date, Section 7.02(l) of the Financing Agreement
is hereby amended by (a) deleting the word “and” appearing at the end of clause
(x) of such Section and inserting a comma in lieu thereof, (b) deleting the
period appearing at the end of clause (y) of such Section, and (z) inserting
the
following new text in lieu thereof:
and
(z)
the issuance of New US Securities, or common Capital Stock of the Parent, for
payment of dividends with respect to New US Securities, which dividends are
permitted by Section 7.02(h).
Section
1.4 Amended
Financial Covenants.
As of
the Fifth Amendment Effective Date, Section 7.03 of the Financing Agreement
is
hereby amended and restated in its entirety to read as follows:
Section
7.03 Financial
Covenants.
So long
as any principal of or interest on any Loan, LC Exposure (other than any LC
Exposure that is cash collateralized in accordance with the terms of this
Agreement) or any other Obligation (whether or not due), other than contingent
obligations or indemnification obligations for which no claim has been asserted,
shall remain unpaid or any Lender shall have any Commitment hereunder, each
Loan
Party shall not, unless the Required Lenders shall otherwise consent in
writing:
(a)
Minimum
Fixed Charge Coverage Ratio.
Permit
the Fixed Charge Coverage Ratio as of the end of each fiscal quarter of the
Parent ending on the dates set forth in the table below to be less than the
applicable corresponding ratio set forth below:
|
Quarter
End
|
Minimum
Fixed Charge Coverage Ratio
|
|
March
31, 2007, and each quarter end occurring thereafter
|
1.25
to 1.00
|
(b)
Cumulative
Total North America (ABL) EBITDA
.
Permit
Cumulative Total North America (ABL) EBITDA (as defined in the Loan Parties'
financial statements as historically presented to the Administrative Agent
and
reported on a basis consistent therewith) on a cumulative basis for any period
set forth in the table below to be less than the applicable corresponding amount
set forth opposite such period below:
|
Period
|
Cumulative
Total North America
(ABL)
EBITDA
|
|
One
complete fiscal quarter ending March 31, 2006
|
$900,000
|
|
Two
complete fiscal quarters ending June 30, 2006
|
$3,800,000
|
|
Three
complete fiscal quarters ending September 30, 2006
|
$10,560,000
|
|
Four
complete fiscal quarters ending December 31, 2006
|
$14,640,000
|
provided,
however,
that,
during the 2006 Fiscal Year only, this Section
7.3(b)
shall
apply from time to time only upon the occurrence of the Covenant Condition
(and
then only as to periods set forth above that have not yet ended), and at all
times thereafter until such time, if any, as the Covenant Release Condition
occurs.
(c)
Total
North America (ABL) Capital Expenditures.
Make,
or
permit any of its Subsidiaries to make, Total North America (ABL) Capital
Expenditures (as defined in the Loan Parties' financial statements as
historically presented to the Administrative Agent and reported on a basis
consistent therewith) that would cause the aggregate amount of all Total North
America (ABL) Capital Expenditures made by the Loan Parties and their
Subsidiaries on a cumulative basis during any period set forth in the table
below to exceed the amount set forth opposite such period below:
|
Period
|
Cumulative
Total North America
(ABL)
Capital Expenditures
|
|
One
complete fiscal quarter ending March 31, 2006
|
$2,560,000
|
|
Two
complete fiscal quarters ending June 30, 2006
|
$5,520,000
|
|
Three
complete fiscal quarters ending September 30, 2006
|
$8,240,000
|
|
Four
complete fiscal quarters ending December 31, 2006
|
$10,240,000
|
provided,
however,
that,
during the 2006 Fiscal Year only, this Section
7.3(c)
shall
apply from time to time only upon the occurrence of the Covenant Condition
(and
then only as to periods set forth above that have not yet ended), and at all
times thereafter until such time, if any, as the Covenant Release Condition
occurs.
ARTICLE
II
LIMITED
WAIVER
Subject
to the terms and conditions set forth herein, the Lenders hereby waive any
noncompliance by any Loan Party with Section 7.03(b) of the Financing Agreement,
and any Event of Default that may have resulted therefrom, to the extent such
non-compliance would not have occurred if the amendment set forth in Section
1.1(b) had been effective as of December 31, 2005.
ARTICLE
III
CONDITIONS
TO CLOSING
This
Amendment shall become effective upon the satisfaction of the following
conditions (such date, the “Fifth
Amendment Effective Date”):
(a) Fifth
Amendment.
Each
Loan Party shall have delivered a duly executed counterpart of this Amendment
to
the Agents.
(b) Officer’s
Certificate.
The
Loan Parties shall have delivered to the Agents a certificate of a duly
authorized officer of each Loan Party dated the Fifth Amendment Effective Date,
in form and substance satisfactory to the Agents, to the effect that the
representations and warranties set forth in Section 4.3 hereof are true and
correct as of such date.
(c) Consent
of Required Lenders.
The
Agents shall have received in writing the consent of the Required Lenders to
enter into this Amendment on behalf of the Required Lenders.
(d) Amendment
Fee.
The
Loan Parties shall have paid to the Administrative Agent, in immediately
available funds, for the pro rata account of each of the Lenders that are party
hereto, a nonrefundable amendment fee of 0.165% of the Total Revolving Credit
Commitment.
(e) Agent
Fees and Expenses.
The
Loan Parties shall have paid any and all fees payable to any Agent under any
fee
letter executed in connection herewith and all reasonable, out-of-pocket fees
and expenses (including, without limitation, reasonable fees, costs, client
charges and expenses of counsel) incurred by the Agents arising from or relating
to the negotiation, preparation, execution, delivery, performance and
administration of this Amendment and arising under or relating to the other
Loan
Documents to the extent invoiced and presented to the Administrative Borrower
on
or prior to the Fifth Amendment Effective Date.
ARTICLE
IV
MISCELLANEOUS
Section
4.1 Effect
of Amendment.
Except
as expressly set forth herein, this Amendment shall not by implication or
otherwise limit, impair, constitute a waiver of, or otherwise affect the rights
and remedies of the Agents or any Lender under the Loan Documents, and shall
not
alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Loan Documents, all of
which are ratified and affirmed
in
all
respects and shall continue in full force and effect. Nothing herein shall
be
deemed to entitle any Loan Party to a consent to, or a waiver, amendment,
modification or other change of, any of the terms, conditions, obligations,
covenants or agreements contained in the Loan Documents in similar or different
circumstances. This Amendment shall constitute a “Loan Document” for all
purposes of the Financing Agreement and all references to the Financing
Agreement in any Loan Document shall mean the Financing Agreement as amended
hereby.
Section
4.2 No
Representations by Lenders or Agent.
Each
Loan Party hereby acknowledges that it has not relied on any representation,
written or oral, express or implied, by any Lender or any Agent, other than
those expressly contained herein, in entering into this Amendment.
Section
4.3 Representations
of the Loan Parties.
Each
Loan Party represents and warrants to the Agents and the Lenders that (i) after
giving effect to this Amendment, (a) the representations and warranties set
forth in the Loan Documents are true and correct in all respects on and as
of
the date hereof with the same effect as though made on the date hereof, except
to the extent that such representations and warranties expressly relate to
an
earlier date and (b) no Default or Event of Default has occurred and is
continuing and (ii) this Amendment has been duly executed and delivered by
such
Loan Party and the Financing Agreement, as amended hereby, constitutes a legal,
valid and binding obligation of such Loan Party, enforceable against such Loan
Party in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at
law.
Section
4.4 Claims.
Each
Loan Party represents and warrants that it has no defenses, offsets or
counterclaims with respect to the indebtedness owed by the Borrowers to the
Lenders, other than in respect of deposits.
Section
4.5 Successors
and Assigns.
This
Agreement shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of the parties
hereto and the successors and permitted assigns of the Lenders and the
Agents.
Section
4.6 Headings.
The
headings and captions hereunder are for convenience only and shall not affect
the interpretation or construction of this Amendment.
Section
4.7 Severability.
The
provisions of this Amendment are intended to be severable. If for any reason
any
provision of this Amendment shall be held invalid or unenforceable in whole
or
in part in any jurisdiction, such provision shall, as to such jurisdiction,
be
ineffective to the extent of such invalidity or unenforceability without in
any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any
jurisdiction.
Section
4.8 Costs
and Expenses.
The
Loan Parties agree to reimburse the Agents for their reasonable out-of-pocket
expenses in connection with this Amendment, including the reasonable fees,
charges and disbursements of counsel for the Agents.
Section
4.9 Counterparts.
This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any party hereto
may
execute this Amendment by signing any such counterpart. Delivery of an
executed
counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
SECTION
4.10 GOVERNING
LAW.
THE
WHOLE OF THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO
SHALL BE GOVERNED, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE
OF NEW YORK.
Section
4.11 JURISDICTION,
VENUE AND SERVICE.
EACH
LOAN PARTY HEREBY IRREVOCABLY CONSENTS AND SUBMITS TO THE NONEXCLUSIVE
JURISDICTION AND VENUE OF ALL FEDERAL AND STATE COURTS LOCATED IN THE COUNTY
OF
NEW YORK, STATE OF NEW YORK AND CONSENTS THAT ANY ORDER, PROCESS, NOTICE OF
MOTION OR OTHER APPLICATION TO OR BY ANY OF SAID COURTS OR A JUDGE THEREOF
MAY
BE SERVED WITHIN OR WITHOUT SUCH COURT’S JURISDICTION BY REGISTERED MAIL OR BY
PERSONAL SERVICE, PROVIDED A REASONABLE TIME FOR APPEARANCE IS ALLOWED, IN
CONNECTION WITH ANY ACTION OR PROCEEDING ARISING OUT OF, UNDER OR RELATING
TO
THIS AMENDMENT. AT THE OPTION OF THE AGENTS, UPON THE INSTRUCTIONS OF THE
REQUIRED LENDERS, ANY LOAN PARTY MAY BE JOINED IN ANY ACTION OR PROCEEDING
COMMENCED BY THE AGENTS OR THE LENDERS AGAINST ANY OTHER LOAN PARTY IN
CONNECTION WITH OR BASED ON THIS AMENDMENT, AND RECOVERY MAY BE HAD AGAINST
ANY
LOAN PARTY IN SUCH ACTION OR PROCEEDING OR IN ANY INDEPENDENT ACTION OR
PROCEEDING AGAINST ANY LOAN PARTY, WITHOUT ANY REQUIREMENT THAT THE AGENTS
OR
THE LENDERS FIRST ASSERT, PROSECUTE OR EXHAUST ANY REMEDY OR CLAIM AGAINST
ANY
OTHER LOAN PARTY. EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES (TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW) ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF,
UNDER OR RELATING TO THIS AMENDMENT BROUGHT IN ANY FEDERAL OR STATE COURT
LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, AND HEREBY FURTHER
IRREVOCABLY WAIVES (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY
CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
SECTION
4.12 WAIVER
OF JURY TRIAL.
EACH OF
THE AGENTS, THE LENDERS AND THE LOAN PARTIES HEREBY KNOWINGLY, VOLUNTARILY
AND
INTENTIONALLY WAIVES (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING
TO
THIS AGREEMENT, AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE
SITTING WITHOUT A JURY. IN ADDITION, EACH OF THE AGENTS, THE LENDERS AND THE
LOAN PARTIES WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE BASED UPON ANY STATUTE
OF
LIMITATIONS OR ANY CLAIM OF LACHES AND ANY SET-OFF OR COUNTER CLAIM OF ANY
NATURE OR DESCRIPTION. EACH OF THE AGENTS, THE LENDERS AND THE LOAN PARTIES
ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE FREELY MADE.
* * *
IN
WITNESS WHEREOF,
the undersigned have caused this Amendment to be duly executed and delivered
as
of the date first above written.
|
BORROWERS:
|
||
| MILACRON INC. | ||
| |
|
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| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |
|
Name: ▇.▇. ▇▇▇▇▇▇▇▇ |
||
| Title: Vice-President – Finance and Chief Financial Officer | ||
|
CIMCOOL
INDUSTRIAL PRODUCTS INC.
D-M-E MANUFACTURING INC.
D-M-E U.S.A. INC.
MILACRON INDUSTRIAL PRODUCTS,
INC.
MILACRON PLASTICS TECHNOLOGIES GROUP
INC.
▇▇▇▇▇▇▇▇▇ MACHINERY CHICAGO,
INC.
NORTHERN SUPPLY COMPANY,
INC.
OAK INTERNATIONAL, INC.
PLIERS INTERNATIONAL INC.
UNILOY MILACRON INC.
UNILOY MILACRON U.S.A.
INC.
|
||
| |
|
|
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |
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Name: ▇.▇. ▇▇▇▇▇▇▇▇ |
||
| Title: Treasurer | ||
| MILACRON MARKETING COMPANY | ||
| |
|
|
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |
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Name: ▇.▇. ▇▇▇▇▇▇▇▇ |
||
| Title: Vice President – Finance, Chief Financial Officer & Controller | ||
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GUARANTORS:
|
||
| D-M-E COMPANY | ||
| |
|
|
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |
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Name: ▇.▇. ▇▇▇▇▇▇▇▇ |
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| Title: Vice President | ||
| MILACRON CAPITAL HOLDINGS B.V. | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ | |
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Name: ▇. ▇▇▇ ▇▇▇▇▇▇▇▇ |
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| Title: Managing Director | ||
| MILACRON INTERNATIONAL MARKETING COMPANY | ||
| |
|
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| By: | /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |
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Name: ▇.▇. ▇▇▇▇▇▇▇▇ |
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| Title: Treasurer and Assistant Secretary | ||
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ADMINISTRATIVE
AGENT AND COLLATERAL AGENT:
|
||
|
JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Collateral Agent,
on behalf
of
the Required Lenders
|
||
| |
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| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
||
| Title: Vice President | ||