Security Agreement between Milacron Inc., Subsidiary Guarantors, and U.S. Bank National Association as Collateral Agent (June 10, 2004)

Summary

This agreement, dated June 10, 2004, is made by Milacron Inc. and certain of its subsidiaries (the Grantors) in favor of U.S. Bank National Association, acting as Collateral Agent for the benefit of the Trustee and holders of Milacron's 11.5% Senior Secured Notes due 2011. The agreement grants a security interest in specified assets of the Grantors to secure obligations under the notes, as required by the related indenture. It outlines the collateral, defines excluded assets, and sets conditions for the release of escrowed note proceeds to the company.

EX-4.6 49 y98028exv4w6.txt SECURITY AGREEMENT EXHIBIT 4.6 SECURITY AGREEMENT SECURITY AGREEMENT, dated June 10, 2004, made by each of the Grantors referred to below, in favor of U.S. Bank National Association, in its capacity as Collateral Agent for the Trustee and the Holders (as such terms are defined below) pursuant to the Indenture referred to below (in such capacity, together with any permitted successors and assigns, the "Collateral Agent"). W I T N E S S E T H: WHEREAS, Milacron Inc., a Delaware corporation (the "Company"), each subsidiary of the Company listed as a "Guarantor" on the signature pages of the supplemental indenture dated the date hereof to the Indenture (each such subsidiary and each subsidiary of the Company that has executed and delivered a Guarantee pursuant to the Indenture, a "Guarantor" and collectively, the "Guarantors," and the Guarantors (other than Milacron Capital Holdings B.V. and any Canadian Restricted Subsidiary) together with the Company, each a "Grantor" and collectively, the "Grantors"), the Collateral Agent and U.S. Bank National Association, in its capacity as trustee (in such capacity, together with any permitted successors and assigns, the "Trustee") are parties to an indenture, dated as of May 26, 2004 (as amended, restated, supplemented or otherwise modified from time to time, being hereinafter referred to as the "Indenture"), with respect to the Company's 11-1/2% Senior Secured Notes due 2011 (the "Notes"); WHEREAS, pursuant to the Indenture, the Company has issued the Notes to the Holders; WHEREAS, it is a condition to the release to the Company from the Escrow Account of the proceeds from the offering of the Notes that each Grantor shall execute and deliver this Agreement; WHEREAS, the Grantors are mutually dependent on each other in the conduct of their respective businesses as an integrated operation, with the credit needed from time to time by each Grantor often being provided through financing obtained by the other Grantors and the ability to obtain such financing being dependent on the successful operations of all of the Grantors as a whole; and WHEREAS, each Grantor has determined that the execution, delivery and performance of this Agreement directly benefits, and are in the best interest of, such Grantor; NOW, THEREFORE, in consideration of the premises and the agreements herein, the Grantors hereby jointly and severally agree with the Collateral Agent, for the benefit of the Trustee and Holders, as follows: SECTION 1. Definitions. (a) Reference is hereby made to the Indenture for a statement of the terms thereof. All terms used in this Agreement and the recitals hereto which are defined in the Indenture or in the Code and which are not otherwise defined herein shall have the same meanings herein as set forth therein; provided that terms used herein which are defined in the Code as in effect on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment of such statute except as the Collateral Agent may otherwise determine. (b) The following terms shall have the respective meanings provided for in the Code (as defined below): "Accounts," "Cash Proceeds," "Chattel Paper," "Commercial Tort Claim," "Commodity Account," "Commodity Contracts," "Deposit Account," "Documents," "Equipment," "Fixtures," "General Intangibles," "Goods," "Instruments," "Inventory," "Investment Property," "Letter-of-Credit Rights," "Noncash Proceeds," "Payment Intangibles," "Proceeds," "Promissory Notes," "Record," "Security Account," "Software," and "Supporting Obligations." (c) As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms: "Code" means the New York UCC; provided that to the extent that the Code is used to define any term herein and such term is defined differently in differing Articles of the Code, the definition of such term contained in Article 9 shall govern. "Copyright Licenses" means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and providing for the grant of any right to use or sell any works covered by any copyright (including, without limitation, all Copyright Licenses set forth in Schedule II hereto). "Copyrights" means all domestic and foreign copyrights, whether registered or not, including, without limitation, all copyright rights throughout the universe (whether now or hereafter arising) in any and all media (whether now or hereafter developed), in and to all original works of authorship fixed in any tangible medium of expression, acquired or used by any Grantor (including, without limitation, all copyrights described in Schedule II hereto), all applications for registration, registrations and recordings of ownership thereof (including, without limitation, applications, registrations and recordings of ownership in the United States Copyright Office or in any similar office or agency of the United States or any other country or any political subdivision thereof), and all extensions, restorations or renewals thereof. "Discharge of Senior Secured Note Obligations" means the payment in full of the Senior Secured Note Obligations that are outstanding and unpaid at the time the Notes are paid in full. "Excluded Assets" means: (i) any lease of premises used only as office space or to warehouse inventory; (ii) any lease, license, permit, franchise, power, authority or right if, to the extent that and for as long as (a) the grant of a security interest therein constitutes or would result in the abandonment, invalidation or unenforceability of such lease, license, permit, franchise, power, authority or right or the termination of, breach of or a default 2 under the lease, instrument or agreement by which such lease, license, permit, franchise, power, authority or right is governed and (b) such abandonment, invalidation, unenforceability, breach, termination or default is not rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC (or any successor provision) or the Code of any other relevant jurisdiction or any other applicable law (including the United States bankruptcy code) or principles of equity; provided, however, that (1) such lease, license, permit, franchise, power, authority or right will be an Excluded Asset only to the extent and for as long as the conditions set forth in clauses (a) and (b) in this definition are and remain satisfied and to the extent such assets otherwise constitute Collateral, will cease to be an Excluded Asset, and will become subject to the Liens hereunder, immediately and automatically at such time as such conditions cease to exist, including by reason of any waiver or consent under the applicable instrument or agreement, and (2) the proceeds of any sale, lease or other disposition of any such lease, license, permit, franchise, power, authority or right that is or becomes an Excluded Asset shall not be an Excluded Asset and shall at all times be and remain subject to the Liens hereunder; (iii) assets or property (a) located outside the United States (other than assets or property of a Canadian Restricted Subsidiary located in Canada) or (b) of any Canadian Restricted Subsidiary other than those of the type described in clauses (1) through (4) of the definition of Credit Facility Priority Collateral; (iv) Deposit Accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of salaried employees; (v) Deposit Accounts held by Oak International, Inc., at Citizens Bank and Nickerson Machinery Chicago Inc. at Fleet National Bank; (vi) any real property acquired after the date of the Indenture with a fair market value of less than $750,000 in the case of a fee interest or with an annual rent of less than $100,000 in the case of a leasehold interest; (vii) Capital Stock of any Subsidiary of the Company or any Guarantor formed under the laws of a jurisdiction other than the United States or any State of the United States or the District of Columbia (a "Foreign Stock Subsidiary") in excess of 65% of the outstanding Capital Stock of such Foreign Stock Subsidiary; (viii) Capital Stock of any non-wholly owned Foreign Stock Subsidiary to the extent that a grant of a Lien therein would conflict with the terms of any organizational document of, agreement governing investments in, or the law of the jurisdiction of formation of, such Foreign Stock Subsidiary; (ix) Capital Stock of Milacron Plastics Machinery (Jiangyin) Co., LTD, D-M-E-(Hong Kong) Limited, Japan D-M-E Corporation, Ferromatix India Limited and any Immaterial Subsidiary; (x) real estate located at 3025 Disney Street, Cincinnati, Ohio 45209 and real estate located at 10501 High M52, Manchester, Michigan 48158; 3 (xi) assets or property of Milacron Capital Holdings, B.V.; and (xii) (a) other personal property (other than Deposit Accounts, Letter of Credit Rights, Intellectual Property and Proceeds of Collateral) in which a security interest cannot be perfected by the filing of a financing statement under the Uniform Commercial Code or Personal Property Security Act or similar Canadian legislation and (b) without duplication, motor vehicles, that have, in the aggregate for all such property and motor vehicles, a fair market value (as determined in good faith by the Company) not exceeding $1,000,000. In addition, any Collateral consisting of any Capital Stock or other securities of any Subsidiary of the Company shall be limited at any time to that portion of such Capital Stock or other securities which value (defined as the principal amount, par value, book value as carried by the Company or market value, whichever is greatest), when considered in the aggregate with all other Capital Stock or other securities of such Subsidiary subject to a security interest hereunder, does not exceed 19.99% of the principal amount of the then outstanding Notes issued, and the portion of any such Capital Stock or other securities of such Subsidiary in excess of such percentage will be deemed Excluded Assets; provided, however, in the event that Rule 3-16 of Regulation S-X promulgated by the SEC is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation or any other law, rule or regulation is adopted, which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of any Subsidiary of the Company due to such Subsidiary's Capital Stock or other securities securing the Notes, then the Capital Stock or other securities of such Subsidiary (the "Excluded Securities") shall automatically be deemed to be Excluded Assets, but only for so long as and to the extent necessary to not be subject to such requirement; provided, further, however, that in such event, this Agreement may be amended or modified, without the consent of any Holder of Notes, to the extent necessary to release the security interests in the Excluded Securities that are deemed to constitute Excluded Assets. "Excluded Accounts" means: (i) Deposit Accounts for which the Collateral Agent is the depositary, (ii) Deposit Accounts specially and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of a Grantor's salaried employees and (iii) Deposit Accounts held by (a) Oak International, Inc. at Citizens Bank and (b) Nickerson Machinery Chicago Inc. at Fleet National Bank, in each case, so long as the aggregate amount of the balances therein do not exceed $200,000 at any one time. "Holder" means a Person in whose name a Note is registered. "Intellectual Property" means the Copyrights, Trademarks and Patents. "IP Security Agreement" means an agreement by a Grantor in favor of the Collateral Agent substantially in the form of Exhibit A hereto. "Licenses" means the Copyright Licenses, the Trademark Licenses and the Patent Licenses. 4 "Material Adverse Effect" means a material adverse effect on the condition (financial or other), business, properties or results of operations of the Grantors and their respective subsidiaries taken as a whole. "Mortgage" means a mortgage (including, without limitation, a leasehold mortgage), deed of trust or deed to secure debt, in form and substance substantially the same as the mortgages delivered to Collateral Agent on the date hereof, made by a Grantor in favor of the Collateral Agent for the benefit of the Trustee and the Holders, securing the Senior Secured Note Obligations and delivered to the Collateral Agent. "New York UCC" means the Uniform Commercial Code, as from time to time in effect in the State of New York. "Patent Licenses" means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor and providing for the grant of any right to manufacture, use or sell any invention covered by any Patent (including, without limitation, all Patent Licenses set forth in Schedule II hereto). "Patents" means all domestic and foreign letters patent, design patents, utility patents, industrial designs, inventions, trade secrets, ideas, concepts, methods, techniques, processes, proprietary information, technology, know-how, formulae, rights of publicity and other general intangibles of like nature, now existing or hereafter acquired (including, without limitation, all domestic and foreign letters patent, design patents and utility patents described in Schedule II hereto), all applications, registrations and recordings of ownership thereof (including, without limitation, applications, registrations and recordings of ownership in the United States Patent and Trademark Office, or in any similar office or agency of the United States or any other country or any political subdivision thereof), and all reissues, divisions, continuations and continuations in part thereof. "Restricted Cash" means any cash or cash equivalents permitted to be deposited or pledged under clause (7), (12) or (14) of the definition of "Permitted Liens" in the Indenture. "Title Insurance Policy" means a mortgagee's loan policy, in form and substance satisfactory to the Collateral Agent, together with all endorsements made from time to time thereto, issued by or on behalf of First American Title Insurance Company (or other title insurance company reasonably satisfactory to the Collateral Agent), insuring the Lien created by a Mortgage in an amount and on terms reasonably satisfactory to the Collateral Agent, delivered to the Collateral Agent. "Trademark Licenses" means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensor or licensee and providing for the grant of any right concerning any Trademark, together with any goodwill connected with and symbolized by any such trademark licenses, contracts or agreements and the right to prepare for sale or lease and sell or lease any and all Inventory now or hereafter owned by any Grantor and now or hereafter covered by such licenses (including, without limitation, all Trademark Licenses described in Schedule II hereto). 5 "Trademarks" means all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a's, Internet domain names, trade styles, designs, logos and other source identifiers and all general intangibles of like nature, now or hereafter owned, adopted, acquired or used by any Grantor (including, without limitation, all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a's and Internet domain names described in Schedule II hereto), all applications, registrations and recordings thereof (including, without limitation, applications, registrations and recordings of ownership in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision thereof), and all extensions and renewals thereof, together with all goodwill of the business symbolized by and associated with such marks and all customer lists, formulae and other Records of any Grantor relating to the distribution of products and services in connection with which any of such marks are used. SECTION 2. Grant of Security Interest. As collateral security for all of the Senior Secured Note Obligations, each Grantor hereby pledges and assigns to the Collateral Agent, and grants to the Collateral Agent, for the benefit of the Trustee and the Holders, a continuing security interest in, all personal property of such Grantor, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind and description, tangible or intangible (the "Collateral"), including, without limitation, the following: (a) all Accounts; (b) all Chattel Paper (whether tangible or electronic); (c) the Commercial Tort Claims specified on Schedule VI hereto; (d) all Deposit Accounts, all cash, and all other property from time to time deposited therein and the monies and property in the possession or under the control of the Collateral Agent, the Trustee, any Holder, any Credit Agreement Agent or any lender under any Qualified Credit Facility or any affiliate, representative, agent or correspondent of the Collateral Agent, the Trustee, any Holder, any such Credit Agreement Agent or any such lender; (e) all Documents; (f) all Equipment; (g) all Fixtures; (h) all General Intangibles (including, without limitation, all Payment Intangibles); (i) all Goods; (j) all Instruments (including, without limitation, Promissory Notes); (k) all Inventory; 6 (l) all Investment Property; (m) all Copyrights, Patents and Trademarks, and all Licenses; (n) all Letter-of-Credit Rights; (o) all Supporting Obligations; (p) all other tangible and intangible personal property of such Grantor (whether or not subject to the Code), including, without limitation, all bank and other accounts and all cash and all investments therein, all proceeds, products, offspring, accessions, rents, profits, income, benefits, substitutions and replacements of and to any of the property of such Grantor described in the preceding clauses of this Section 2 (including, without limitation, any proceeds of insurance thereon and all causes of action, claims and warranties now or hereafter held by such Grantor in respect of any of the items listed above), and all books, correspondence, files and other Records, including, without limitation, all tapes, disks, cards, Software, data and computer programs in the possession or under the control of such Grantor or any other Person from time to time acting for such Grantor that at any time evidence or contain information relating to any of the property described in the preceding clauses of this Section 2 or are otherwise necessary or helpful in the collection or realization thereof; and (q) all Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any and all of the foregoing Collateral; in each case howsoever such Grantor's interest therein may arise or appear (whether by ownership, security interest, claim or otherwise); provided, however, that notwithstanding any of the other provisions set forth in this Section 2, this Agreement shall not constitute a grant of a security interest in any of the Excluded Assets. SECTION 3. Security for Senior Secured Note Obligations. The security interest created hereby in the Collateral constitutes continuing collateral security for all of the Senior Secured Note Obligations. SECTION 4. Representations and Warranties. Each Grantor jointly and severally represents and warrants as follows (it being understood and agreed that, to the extent any Schedule hereto is required to be supplemented pursuant to Section 5 to reflect any change in facts or circumstances after the date hereof and such Schedule is supplemented for such change in accordance with Section 5, such Schedule shall be deemed supplemented to reflect such change in facts or circumstances from time to time of such change for all purposes of this Section 4): (a) Schedule I hereto sets forth (i) the exact legal name of each Grantor and (ii) the organizational identification number of each Grantor or states that no such organizational identification number exists. (b) Each Grantor (i) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good standing under the laws of the state, province or jurisdiction of its organization as set forth on Schedule I hereto, (ii) has all requisite 7 power and authority to conduct its business as now conducted and as presently contemplated and to execute, deliver and perform this Agreement and each other Senior Secured Note Document to be executed and delivered by it pursuant hereto and to consummate the transactions contemplated hereby and thereby, and (iii) is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary, except where the absence of any such qualification could not reasonably be expected to result in a Material Adverse Effect. (c) The execution, delivery and performance by each Grantor of this Agreement and each other Senior Secured Note Document to which such Grantor is or will be a party (i) have been duly authorized by all necessary action, (ii) do not and will not contravene its charter or by-laws, its limited liability company or operating agreement or its certificate of partnership or partnership agreement, as applicable, or any material applicable law or any material contractual restriction binding on or otherwise affecting such Grantor or any of its properties, (iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Senior Secured Note Document or any Credit Facility Document) upon or with respect to any of its properties, other than Liens securing obligations in an aggregate amount not exceeding $100,000 and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to it or its operations or any of its properties. (d) This Agreement is, and each other Senior Secured Note Document to which any Grantor is or will be a party, when executed and delivered, will be, a legal, valid and binding obligation of such Grantor, enforceable against such Grantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. (e) There is no pending or, to the best knowledge of any Grantor, threatened action, suit or proceeding affecting any Grantor or its properties, before any court or other governmental authority or any arbitrator, or any order, judgment or award by any governmental authority or arbitrator, that could reasonably be expected to materially affect the grant by any Grantor, or the perfection, of the security interest purported to be created hereby in the Collateral, or the exercise by the Collateral Agent of any of its rights or remedies hereunder. (f) All Federal and material foreign, state and local tax returns and other reports required by applicable law to be filed by any Grantor have been filed, or extensions have been obtained, and all taxes, assessments and other governmental charges imposed upon any Grantor or any property of such Grantor and which have become due and payable on or prior to the date hereof have been paid, except such taxes, assessments and governmental charges in an aggregate amount not exceeding $100,000 or to the extent contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and with respect to which adequate reserves have been set aside for the payment thereof on the most recently available consolidated financial statements of the Company to the extent required by and in accordance with GAAP. 8 (g) All Equipment, Fixtures, Goods and Inventory now existing and constituting Collateral are located and/or based at the addresses specified therefor in Schedule III hereto (as amended, supplemented or otherwise modified from time to time in accordance with the terms hereof), other than Equipment, Fixtures, Goods or Inventory in transit between any such locations and Goods or Inventory that have been sold (including sales on consignment or approval in the ordinary course of business) and each Grantor's chief place of business and chief executive office, the place where such Grantor keeps its Records concerning Accounts and all originals of all Chattel Paper are located at the addresses specified therefor in Schedule III hereto; provided that Schedule III hereto shall not contain any name or location of any Person (other than a Grantor) having possession of any Equipment, Fixtures, Goods, Inventory, Records or other assets having an aggregate book value of less than $25,000. As of the date hereof, none of the Accounts are evidenced by Promissory Notes or other Instruments. Set forth in Schedule IV hereto is a complete and accurate list, as of the date of this Agreement, of each Deposit Account, Securities Account and Commodities Account located in the United States of each Grantor, together with the name and address of each institution at which each such Account is maintained, the account number for each such Account and a description of the purpose of each such Account. Set forth in Schedule II hereto is (i) a complete and correct list of each trade name used by each Grantor and (ii) the name of, and each trade name used by, each Person from which such Grantor has acquired any substantial part of the Collateral within five years prior to the date hereof. (h) Each Grantor has delivered to the Collateral Agent complete and correct copies of each License described in Schedule II hereto, including all schedules and exhibits thereto, which represents all of the Licenses existing on the date of this Agreement material to the business of each Grantor. Each such License sets forth, in all material respects, the entire agreement and understanding of the parties thereto relating to the subject matter thereof, and there are no other material agreements, arrangements or understandings, written or oral, relating to the matters covered thereby or the rights of any Grantor or any of its Affiliates in respect thereof. Each License now existing is the legal, valid and binding obligation of the Grantors party thereto and, to the best knowledge of such Grantors, each other party thereto, enforceable against such parties in accordance with its terms (except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws and subject to general principals of equity, regardless of whether considered in a proceeding in equity or at law). No default thereunder by any Grantor has occurred, nor, to the best knowledge of any Grantor, does any defense, offset, deduction or counterclaim exist thereunder in favor of any such party thereto other than a Grantor. (i) The Grantors own and control, or otherwise possess adequate rights to use, all Trademarks, Patents and Copyrights, which are necessary to conduct their business in substantially the same manner as conducted as of the date hereof. Schedule II hereto sets forth a true and complete list of all Intellectual Property registrations and applications for registration owned by any Grantor and all Licenses material to the business of each Grantor as of the date hereof. All Intellectual Property scheduled on Schedule II hereto is subsisting and in full force and effect, has not been adjudged invalid or unenforceable, is, to the best knowledge of any Grantor, valid and enforceable and has not been abandoned in whole or in part. Except as set forth in Schedule II and except pursuant to any Permitted Lien, no such Intellectual Property is the subject of any licensing or franchising agreement. No Grantor has any knowledge of any 9 conflict with the rights of others to any Intellectual Property it owns, and, except as set forth in Schedule II hereto, to the best knowledge of each Grantor, no Grantor is now infringing or in conflict with any such rights of others in any material respect, and to the best knowledge of each Grantor, no other Person is now infringing or in conflict in any material respect with the Intellectual Property owned by such Grantor. Except as set forth in Schedule II hereto, (i) no claim, litigation, arbitration or other adversarial proceeding is pending relating to any claim that any Grantor is violating or has violated the trademarks, patents, copyrights, rights of publicity or other intellectual property rights of any third party, and (ii) to the extent any Grantor received notice of any such claim in the five (5) year period immediately preceding the date hereof, no such notice (or any claim referred to therein) remains unresolved as of the date hereof. (j) The Grantors are and will be at all times the sole and exclusive owners of, or otherwise have and will have adequate rights in, the Collateral free and clear of any Lien except for (i) the Lien created by this Agreement and (ii) the Permitted Liens. No effective financing statement or other instrument similar in effect covering all or any part of the Collateral is on file in any recording or filing office except (A) such as may have been filed in favor of the Collateral Agent relating to this Agreement and (B) such as may have been filed to perfect or protect any Permitted Lien. (k) The exercise by the Collateral Agent of any of its rights and remedies expressly enumerated in this Agreement, subject to the terms of the Intercreditor Agreement and the rights of Persons holding Permitted Liens, will not contravene any law or any material contractual restriction binding on or otherwise affecting any Grantor or any of its material properties and will not result in, or require the creation of, any Lien upon or with respect to any of its properties. (l) No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority is required for (i) the grant by any Grantor, or the perfection, of the security interest purported to be created hereby in the Collateral or (ii) the exercise by the Collateral Agent of any of its rights and remedies expressly enumerated in this Agreement (other than with respect to Investment Property constituting Capital Stock (whether or not certificated) of any Person who is organized or formed under the laws of a jurisdiction other than the District of Columbia or any State or territory of the United States of America), except (A) for the filing under the Uniform Commercial Code as in effect in the applicable jurisdiction of the financing statements as described in Schedule V hereto, all of which financing statements, filings and other recordings, as applicable, have been duly filed and are in full force and effect, (B) with respect to the perfection of the security interest created hereby in the United States Intellectual Property registrations and applications for registration owned by any Grantor, for the recording of the appropriate IP Security Agreement, substantially in the form of Exhibit A hereto, together with the submission of the required recording fees and other required documents, in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, within the three-month period pursuant to 35 U.S.C. Section 261 or 15 U.S.C. Section 1060 or the one-month period pursuant to 17 U.S.C. Section 205, (C) with respect to the perfection of the security interest created hereby in motor vehicles (including, without limitation, all trucks, trailers, tractors, service vehicles, automobiles and other mobile equipment) for which the title to such motor vehicles is governed by a certificate of title or ownership (collectively, the "Motor Vehicles"), for the submission of an appropriate application requesting that the Lien of the Collateral Agent be 10 noted on the certificate of title or ownership, completed and authenticated by the applicable Grantor, together with the certificate of title, with respect to each Motor Vehicle, to the appropriate state agency, (D) with respect to any action that may be necessary to obtain control of Collateral described in Sections 5(i) and 5(k) hereof, the taking of such actions and, (E) the taking possession of all Documents, Chattel Paper, Instruments and cash constituting Collateral and (F) to the extent applicable, as may be required in connection with any sale of any Collateral by laws affecting the offering and sale of securities generally other than those that have been obtained or made and are in full force and effect. (m) This Agreement creates in favor of the Collateral Agent for the benefit of the Trustee and the Holders a legal, valid and enforceable security interest in the Collateral, as security for the Senior Secured Note Obligations. The Collateral Agent's having possession (or, with respect to Collateral constituting Credit Facility Priority Collateral, the Credit Facility Agent having possession, as agent for the Collateral Agent pursuant to the terms of the Intercreditor Agreement) of all Instruments, Documents and Chattel Paper and cash constituting Collateral and obtaining control of all Collateral described in Sections 5(i) and 5(k) hereof from time to time, with respect to United States Intellectual Property registrations and applications for registration owned by the Grantors, the recording of the appropriate IP Security Agreement executed pursuant hereto, together with the submission of the required recording fees and other required documents, in the United States Patent and Trademark Office and the United States Copyright Office, as applicable, within the three-month period pursuant to 35 U.S.C. Section 261 or 15 U.S.C. Section 1060 or the one-month period pursuant to 17 U.S.C. Section 205, the submission, at the request of the Collateral Agent pursuant to Section 5(j), of an appropriate application requesting that the Lien of the Collateral Agent be noted on the certificate of title or ownership, completed and authenticated by the applicable Grantor, together with the certificate of title or ownership, with respect to such Motor Vehicles, to the applicable state agency, and the filing of the financing statements and the other filings and recordings, as applicable, described in Schedule V hereto and, with respect to the United States Intellectual Property registrations and applications for registration that are hereafter existing and owned by the Grantors and not covered by an appropriate IP Security Agreement, the recording in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, of appropriate instruments of assignment for security together with submission of the required recording fees and other required documents, result in the perfection of such security interests, to the extent governed by Articles 8 and 9 of the Code. To the extent governed by Articles 8 and 9 of the New York UCC, such security interests are, or in the case of Collateral in which any Grantor obtains rights after the date hereof, will be, perfected security interests (other than, as to perfection, Restricted Cash and Excluded Deposit Accounts), subject only to Permitted Prior Liens and Credit Facility Liens that are prior to the Liens held by the Collateral Agent, for the benefit of the Trustee and the Holders, and the recording of such instruments of assignment. Such recordings and filings and all other actions necessary or desirable to perfect and protect such security interest under Articles 8 and 9 of the New York UCC have been duly taken, except for (i) the Collateral Agent's having possession of Instruments, Documents and Chattel Paper and cash (other than Restricted Cash) constituting Collateral after the date hereof, (ii) the Collateral Agent obtaining control of any Collateral described in Sections 5(i) and 5(k) of this Agreement after the date hereof and (iii) the other filings and recordations described in Section 4(l) hereof. 11 (n) As of the date hereof, no Grantor holds any Commercial Tort Claims, with a claim exceeding $100,000, or is aware of any such pending claims in respect of which any Grantor has a reasonable expectation of recovering in excess of $100,000, except for such claims described in Schedule VI. (o) The partnership interests or membership interests of each Grantor in each of its Subsidiaries that is a partnership or a limited liability company (excluding joint ventures) are not (i) dealt in or traded on securities exchanges or in securities markets, (ii) securities for purposes of Article 8 of any relevant Uniform Commercial Code, (iii) investment company securities within the meaning of Section 8-103 of any relevant Uniform Commercial Code and (iv) evidenced by a certificate. Such partnership interests or membership interests constitute General Intangibles. SECTION 5. Covenants as to the Collateral. Until the Discharge of the Senior Secured Note Obligations, unless the Collateral Agent shall otherwise consent in writing: (a) Further Assurances. Each Grantor will at its expense, at any time and from time to time, promptly execute and deliver all further instruments and documents and take all further action that the Collateral Agent may determine to be reasonably necessary or desirable to (i) perfect and protect the security interest purported to be created hereby; (ii) enable the Collateral Agent to exercise and enforce its rights and remedies hereunder in respect of the Collateral; or (iii) otherwise effect the purposes of this Agreement, including, without limitation: (A) from and after the date upon which the Discharge of Credit Facility Obligations has occurred, marking conspicuously all Chattel Paper (to the extent such Chattel Paper is not in the possession of the Collateral Agent) with a legend, in form and substance reasonably satisfactory to the Collateral Agent, indicating that such Chattel Paper is subject to the security interest created hereby, (B) from and after the date upon which the Discharge of Credit Facility Obligations has occurred, if any Account shall be evidenced by Promissory Notes or other Instruments or Chattel Paper, delivering and pledging to the Collateral Agent (or its agent) hereunder such Promissory Notes, Instruments or Chattel Paper, duly endorsed and accompanied by executed instruments of transfer or assignment, all in form and substance reasonably satisfactory to the Collateral Agent, (C) executing and filing (to the extent, if any, that such Grantor's signature is required thereon) or authenticating the filing of, such financing or continuation statements, or amendments thereto, as the Collateral Agent may determine to be reasonably necessary or desirable to perfect and preserve the security interest purported to be created hereby, (D) furnishing to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Collateral Agent may reasonably request, all in reasonable detail, (E) if any Collateral shall be in the possession of a third party, notifying such Person of the Collateral Agent's security interest created hereby and using its reasonable efforts to obtain a landlord waiver or bailee letter or such other written acknowledgment from such Person that such Person holds possession of the Collateral for the benefit of the Collateral Agent, which such written acknowledgment shall be in form and substance reasonably satisfactory to the Collateral Agent, provided that, such Grantor's obligation to obtain such landlord waiver, bailee letter or other written acknowledgement with respect to any Collateral constituting Credit Facility Priority Collateral shall only be applicable from and after the date upon which the Discharge of Credit Facility Obligations has occurred, (F) if, at any time after the date hereof, any Grantor acquires 12 or holds any Commercial Tort Claim, promptly notifying the Collateral Agent in a writing signed by such Grantor setting forth a brief description of such Commercial Tort Claim and granting to the Collateral Agent a security interest therein and in the proceeds thereof, which writing shall incorporate the provisions hereof and shall be in form and substance reasonably satisfactory to the Collateral Agent, and (G) at the request of the Collateral Agent, upon the acquisition after the date hereof by any Grantor of any Motor Vehicle or other Equipment subject to a certificate of title or ownership (other than a Motor Vehicle or Equipment that is subject to a purchase money security interest permitted by Section 4.12 of the Indenture), immediately notifying the Collateral Agent of such acquisition, setting forth a description of the Motor Vehicle or other Equipment acquired and a good faith estimate of the current value of such Motor Vehicle or Equipment, and if so requested by the Collateral Agent, immediately causing the Collateral Agent to be listed as the lienholder on such certificate of title or ownership and delivering evidence of the same to the Collateral Agent. (b) Location of Equipment and Inventory. Each Grantor will keep the Equipment and Inventory (other than Inventory and used Equipment sold in the ordinary course of business in accordance with Section 5(g) hereof and Equipment and Inventory not required to be at such location pursuant to Section 4(g) hereof) at one or more of the locations specified therefor in Section 4(g) hereof or, upon not less than thirty (30) days' prior written notice to the Collateral Agent accompanied by a new Schedule III hereto indicating each new location of the Equipment and Inventory, in each case, with an aggregate book value exceeding $100,000, at such other locations in the continental United States, as the Grantors may elect, provided that (i) all action has been taken to grant to the Collateral Agent a perfected security interest in such Equipment and Inventory (subject only to Permitted Prior Liens and Credit Facility Liens that are prior to the Liens held by the Collateral Agent, for the benefit of the Trustee and the Holder), and (ii) the Collateral Agent's rights in such Equipment and Inventory, including, without limitation, the existence, perfection and priority of the security interest created hereby in such Equipment and Inventory, are not adversely affected thereby. (c) Condition of Equipment. Each Grantor will maintain or cause the Equipment to be maintained and preserved in working order and condition, ordinary wear and tear excepted, and will forthwith, or in the case of any material loss or damage to any Equipment as promptly as practicable after the occurrence thereof, make or cause to be made all repairs, replacements and other improvements in connection therewith which are necessary or desirable, consistent with past practice, or which the Collateral Agent may reasonably request to such end. Each Grantor will promptly furnish to the Collateral Agent a statement describing in reasonable detail any loss or damage in excess of $100,000 to any Equipment. (d) Taxes, Etc. Each Grantor jointly and severally agrees to pay promptly when due all property and other taxes, assessments and governmental charges or levies imposed upon, and all claims (including claims for labor, materials and supplies) against, the Equipment and Inventory, except to the extent the validity thereof is being contested in good faith by proper proceedings which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and with respect to which adequate reserves, if any, in accordance with GAAP have been set aside for the payment thereof. 13 (e) Insurance. (i) Each Grantor will, at its own expense: (A) keep its properties adequately insured at all times by responsible and reputable insurers; (B) maintain such other insurance, to such extent and against such risks (and with such deductibles, retentions and exclusions), including fire and other risks insured against by extended coverage and coverage for acts of terrorism, as is customary with companies in the same or similar businesses operating in the same or similar locations, including public liability insurance against claims for personal injury or death or property damage occurring upon, in, about or in connection with the use of any properties owned, occupied or controlled by it; (C) maintain such other insurance as may be required by law provided, however, that each Grantor may maintain self-insurance (which shall include insurance maintained through Milacron Assurance Ltd., a Bermuda Company) in connection with the above insurance requirements to the extent, reasonably prudent and consistent with past practice. In addition, (A) each such liability policy (other than any Director's and Officer's liability policy and any Fiduciary Responsibility liability policy) shall name each Grantor and the Collateral Agent (and such other Persons as the Collateral Agent may designate from time to time) as additional insured thereunder (without any representation or warranty by or obligation upon the Collateral Agent or such other Person) as their interests may appear and each property policy shall name each Grantor and the Collateral Agent as loss payees as their interests may appear, (B) each property policy shall contain an agreement by the insurer that any loss thereunder shall be payable to the Collateral Agent, as its interest may appear, on its own account notwithstanding any action, inaction or breach of representation or warranty by any Grantor, (C) each such policy shall provide that there shall be no recourse against the Collateral Agent for payment of premiums or other amounts with respect thereto and (D) each such policy shall provide that at least thirty (30) days' prior written notice of cancellation, lapse, expiration or other adverse change shall be given to the Collateral Agent by the insurer. Each Grantor will, if so requested by the Collateral Agent, deliver to the Collateral Agent certificates of insurance evidencing such insurance and, as often as the Collateral Agent may reasonably request, a report of a reputable insurance broker with respect to such insurance. Each Grantor will also, at the request of the Collateral Agent, execute and deliver instruments of assignment of such insurance policies and cause the respective insurers to acknowledge notice of such assignment. (ii) Reimbursement under any liability insurance maintained by any Grantor pursuant to this Section 5(e) may be paid directly to the Person who shall have incurred liability covered by such insurance. 14 (iii) After Acquired Real Property. Each Grantor shall, upon the acquisition by such Grantor thereof after the date of the Indenture of any interest (whether fee or leasehold) in any real property (wherever located) other than an interest constituting an Excluded Asset (each such interest being an "After Acquired Property") (x) with a Current Value (as defined below) in excess of $750,000 in the case of a fee interest, or (y) requiring the payment of annual rent exceeding in the aggregate $100,000 in the case of a leasehold interest, promptly so notify the Collateral Agent, setting forth with specificity a description of the interest acquired, the location of the real property, any structures or improvements thereon and either an appraisal or such Grantor's good-faith estimate of the current value of such real property (for purposes of this Section, the "Current Value"). The Collateral Agent shall notify such Grantor whether it intends to require a Mortgage and the other documents referred to below or in the case of leasehold, a leasehold Mortgage or landlord waiver (pursuant to Section 5(a)). Upon receipt of such notice requesting a Mortgage, the Grantor which has acquired such After Acquired Property shall promptly furnish to the Collateral Agent the following, each in form and substance reasonably satisfactory to the Collateral Agent: (i) a Mortgage with respect to such real property and related assets located at the After Acquired Property, each duly executed by such Person and in recordable form, (ii) evidence of the recording of the Mortgage referred to in clause (i) above in such office or offices as may be necessary or, in the opinion of the Collateral Agent, desirable to create and perfect a valid and enforceable first priority lien on the property purported to be covered thereby or to otherwise protect the rights of the Collateral Agent and the Trustee and the Holders thereunder, (iii) a Title Insurance Policy, (iv) a survey of such real property, certified to the Collateral Agent and to the issuer of the Title Insurance Policy by a licensed professional surveyor reasonably satisfactory to the Collateral Agent, (v) at the Collateral Agent's reasonable request, Phase I Environmental Site Assessments, or such other non-intrusive and non-Phase II environmental assessment as the Collateral Agent may reasonably request, with respect to such real property, by a consultant reasonably satisfactory to the Collateral Agent, (vi) in the case of a leasehold interest, a certified copy of the lease between the landlord and such Person with respect to such real property in which such Person has a leasehold interest, and the certificate of occupancy with respect thereto, (vii) in the case of a leasehold interest, an attornment and nondisturbance agreement between the landlord (and any fee mortgagee) with respect to such real property and the Collateral Agent, and (viii) such other documents or instruments (including guarantees and opinions of counsel) as the Collateral Agent may reasonably require. The applicable Grantor shall pay all reasonable fees and expenses, including reasonable attorneys' fees and expenses, and all title insurance charges and premiums, in connection with such Grantor's obligations under this Section 5(e)(iii). (f) Provisions Concerning Certain Accounts and the Licenses. (i) No Grantor shall, without prior written notice to the Collateral Agent, change (A) such Grantor's name, identity or organizational structure or (B) its jurisdiction of incorporation as set forth in Section 4(b) hereto. Each Grantor shall (x) promptly notify the Collateral Agent upon obtaining an organizational identification number, if on the date hereof such Grantor did not have such identification number, and (y) keep adequate records concerning the Accounts and Chattel Paper and permit representatives of the Collateral Agent, upon reasonable prior notice and during normal business hours, to inspect and make abstracts from such Records and Chattel Paper. 15 (ii) Each Grantor will, except as otherwise provided in this subsection (f), continue to collect, at its own expense, all amounts due or to become due under the Accounts. In connection with such collections, each Grantor may (and, at the Collateral Agent's (or its agent's) direction, will) take such action as such Grantor or the Collateral Agent (or its agent) may deem reasonably necessary or advisable to enforce collection or performance of the Accounts; provided, however, that the Collateral Agent (or its agent) shall have the right at any time following the date upon which the Discharge of Credit Facility Obligations has occurred, upon the occurrence and during the continuance of an Event of Default, to notify the Account Debtors or obligors under any Accounts of the assignment of such Accounts to the Collateral Agent (or its agent) and to direct such Account Debtors or obligors to make payment of all amounts due or to become due to such Grantor thereunder directly to the Collateral Agent or its designated agent and, upon such notification and at the expense of such Grantor and to the extent permitted by law, to enforce collection of any such Accounts and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Grantor might have done. After receipt by any Grantor of a notice from the Collateral Agent that the Collateral Agent has notified, intends to notify, or has enforced or intends to enforce a Grantor's rights against the Account Debtors or obligors under any Accounts as referred to in the proviso to the immediately preceding sentence, (A) all amounts and proceeds (including Instruments) received by such Grantor in respect of the Accounts shall be received in trust for the benefit of the Collateral Agent hereunder, shall be segregated from other funds of such Grantor and shall be forthwith paid over to the Collateral Agent or its designated agent in the same form as so received (with any necessary endorsement) to be held as cash collateral and, if an Event of Default shall have occurred and be continuing, applied as specified in Section 7(b) hereof, and (B) such Grantor will not adjust, settle or compromise the amount or payment of any Account or release wholly or partly any Account Debtor or obligor thereof or allow any credit or discount thereon. In addition, following the date upon which the Discharge of Credit Facility Obligations has occurred, upon the occurrence and during the continuance of an Event of Default, the Collateral Agent (or its agent) may (in its sole and absolute discretion) direct any or all of the banks and financial institutions with which any Grantor either maintains a Deposit Account or a lockbox or deposits the proceeds of any Accounts to send immediately to the Collateral Agent or its designated agent by wire transfer (to such cash management accounts as the Collateral Agent shall specify, or in such other manner as the Collateral Agent (or its agent) shall direct) all or a portion of such securities, cash, investments and other items held by such institution. Any such securities, cash, investments and other items so received by the Collateral Agent or its designated agent shall (in the sole and absolute discretion of the Collateral Agent or such designated agent) be held as additional Collateral for the Senior Secured Note Obligations or distributed in accordance with Section 7 hereof. 16 (iii) Upon the occurrence and during the continuance of any material breach or default under any License material to the conduct of a Grantor's business or any License under which any material Intellectual Property owned by a Grantor is licensed to a third party, by any party thereto other than a Grantor, (A) the relevant Grantor will, promptly after obtaining knowledge thereof, give the Collateral Agent written notice of the nature and duration thereof, specifying what action, if any, it has taken and proposes to take with respect thereto, (B) no Grantor will, without the prior written consent of the Collateral Agent, declare or waive any such breach or default or affirmatively consent to the cure thereof or exercise any of its remedies in respect thereof, and (C) each Grantor will, upon written instructions from the Collateral Agent and at such Grantor's expense, take such action as the Collateral Agent may deem reasonably necessary or advisable in respect thereof. (iv) Each Grantor will, at its expense, promptly deliver to the Collateral Agent a copy of each material notice or other material communication received by it by which any other party to any License material to the operation of a Grantor's business or any License under which any material Intellectual Property owned by a Grantor is licensed to a third party purports to exercise any of its rights or affect any of its obligations thereunder, in a manner adverse to any Grantor, together with a copy of any reply by such Grantor thereto. (v) Each Grantor will exercise promptly and diligently each and every right which it may have under each License (other than any right of termination) and will duly perform and observe in all respects all of its material obligations under each License and will take all action necessary to maintain the Licenses that are material to the continued operation of such Grantor's business in full force and effect. No Grantor will, without the prior written consent of the Collateral Agent, cancel, terminate, amend or otherwise modify in any respect, or waive any material provision of, any License referred to in Schedule II hereto that are material to the continued operation of such Grantor's business. (g) Transfers and Other Liens. (i) Except to the extent not prohibited by Section 4.10 of the Indenture, no Grantor will sell, assign (by operation of law or otherwise), lease, license, exchange or otherwise transfer or dispose of any of the Collateral. (ii) Except to the extent not prohibited by Section 4.12 of the Indenture, no Grantor will create, suffer to exist or grant any Lien upon or with respect to any Collateral. (h) Intellectual Property. (i) If applicable, each Grantor has duly executed and delivered the applicable IP Security Agreement in the form attached hereto as Exhibit A. Each Grantor (either itself or through licensees) will, and will cause each licensee thereof to, take all action necessary to maintain the Intellectual Property in full force and effect, including, without limitation, using the proper statutory notices and markings and using the Trademarks on each applicable trademark class of goods in order to so maintain the Trademarks in full force, free from any claim of abandonment for non-use, and no Grantor will (nor permit any licensee thereof to) do 17 any act or knowingly omit to do any act whereby any Intellectual Property may become invalidated; provided, however, that so long as no Event of Default has occurred and is continuing, no Grantor shall have an obligation to use or to maintain any Intellectual Property (A) that relates solely to any product or work, that has been, or is in the process of being, discontinued, abandoned or terminated, (B) that is being replaced with Intellectual Property substantially similar to the Intellectual Property that may be abandoned or otherwise become invalid, so long as the failure to use or maintain such Intellectual Property does not materially adversely affect the validity of such replacement Intellectual Property and so long as such replacement Intellectual Property is subject to the Lien created by this Agreement, (C) that is substantially the same as another Intellectual Property that is in full force, so long as the failure to use or maintain such Intellectual Property does not materially adversely affect the validity of such replacement Intellectual Property and so long as such other Intellectual Property is subject to the Lien and security interest created by this Agreement or (D) is otherwise no longer material to the Business of such Grantor and is no longer of any other material value. Each Grantor will cause to be taken all necessary steps in any proceeding before the United States Patent and Trademark Office and the United States Copyright Office or any similar office or agency in any other country or political subdivision thereof to maintain each registration of the Intellectual Property (other than the Intellectual Property described in the proviso to the immediately preceding sentence), including, without limitation, filing of renewals, affidavits of use, affidavits of incontestability and opposition, interference and cancellation proceedings and payment of maintenance fees, filing fees, taxes or other governmental fees. If any Intellectual Property material to the operation of a Grantor's business or that generates licensing revenue is infringed, misappropriated, diluted or otherwise violated in any material respect by a third party, the Grantors shall (x) upon obtaining knowledge of such infringement, misappropriation, dilution or other violation, promptly notify the Collateral Agent and (y) to the extent the Grantors shall deem appropriate under the circumstances, promptly sue for infringement, misappropriation, dilution or other violation, seek injunctive relief where appropriate and recover any and all damages for such infringement, misappropriation, dilution or other violation, or take such other actions as the Grantors shall deem appropriate under the circumstances to protect such Intellectual Property. Each Grantor shall furnish to the Collateral Agent, from time to time upon the Collateral Agent's request, statements and schedules further identifying and describing the Intellectual Property and Licenses and such other reports in connection with the Intellectual Property and Licenses as the Collateral Agent may reasonably request, all in reasonable detail and promptly upon request of the Collateral Agent, following receipt by the Collateral Agent of any such statements, schedules or reports, the Grantors shall modify this Agreement by amending Schedule II hereto, as the case may be, to include any Intellectual Property and License, as the case may be, which becomes part of the Collateral under this Agreement and shall execute and authenticate such documents and do such acts as shall be necessary or, in the judgment of the Collateral Agent, desirable to subject such Intellectual Property and Licenses to the Lien and security interest created by this Agreement. Notwithstanding anything herein to the contrary, upon the occurrence and during the continuance of an Event of Default, no Grantor may abandon any of those Intellectual Property registrations, applications for registration or material unregistered Trademarks owned by such Grantor, nor may any Grantor do or omit to do anything, which action or omission would be reasonably likely to result in the invalidity of any Intellectual Property registration or application for registration owned by such Grantor or the loss of any trade secret owned by such Grantor without the prior written consent of the Collateral 18 Agent, and if any Intellectual Property owned by any Grantor is infringed, misappropriated, diluted or otherwise violated in any material respect by a third party, the Grantors will take such action as the Collateral Agent shall deem appropriate under the circumstances to protect such Intellectual Property. (ii) In no event shall any Grantor, either itself or through any agent, employee, licensee or designee, file an application for the registration of any Trademark or Copyright or the issuance of any Patent with the United States Patent and Trademark Office or the United States Copyright Office, as applicable, or in any similar office or agency of the United States or any country or any political subdivision thereof unless it promptly notifies the Collateral Agent thereof. Upon request of the Collateral Agent, each Grantor shall execute, authenticate and deliver any and all assignments, agreements, instruments, documents and papers as the Collateral Agent may reasonably request to evidence the Collateral Agent's security interest hereunder in such Intellectual Property and the General Intangibles of such Grantor relating thereto or represented thereby, and each Grantor hereby appoints the Collateral Agent its attorney-in-fact to execute and/or authenticate and file all such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed, and such power (being coupled with an interest) shall be irrevocable until date on which the Discharge of Senior Secured Note Obligations has occurred. (i) Deposit, Commodities and Securities Accounts. Each Grantor shall cause each bank and other financial institution with an account referred to in Schedule IV hereto to execute and deliver to the Collateral Agent (or its agent) a control agreement, in form and substance reasonably satisfactory to the Collateral Agent, duly executed by such Grantor and such bank or financial institution, or enter into other arrangements in form and substance satisfactory to the Collateral Agent, pursuant to which such institution shall irrevocably agree (except to the extent otherwise agreed to by the Trustee and the Collateral Agent), among other things, that (i) it will comply at any time with the instructions originated by the Collateral Agent (or its agent) to such bank or financial institution directing the disposition of cash, Commodity Contracts, securities, Investment Property and other items from time to time credited to such account, without further consent of such Grantor, which instructions the Collateral Agent (or its agent) will not give to such bank or other financial institution in the absence of a continuing Event of Default, (ii) all cash, Commodity Contracts, securities, Investment Property and other items of such Grantor deposited with such institution shall be subject to a perfected, first priority security interest in favor of the Collateral Agent (or its agent), (iii) any right of set off, banker's Lien or other similar Lien, security interest or encumbrance shall be fully waived as against the Collateral Agent (or its agent), and (iv) such bank or financial institution shall immediately send to the Collateral Agent (or its agent) by wire transfer (to such account as the Collateral Agent (or its agent) shall specify, or in such other manner as the Collateral Agent (or its agent) shall direct) all such cash, the value of any Commodity Contracts, securities, Investment Property and other items held by it. The Collateral Agent agrees with each of the Grantors that in respect of any control agreement that provides for shared control between the Collateral Agent (or its agent) and a Grantor in respect of any Deposit Account, Commodity Account or Securities Account, the Collateral Agent (or its agent) shall not deliver to the bank or financial institution a notice of exclusive control in respect of such Deposit Account, Commodity Account or Securities Account unless there is an occurrence and continuance of an Event of Default. The Collateral Agent further agrees with each of the Grantors to withdraw any such notice of exclusive control as soon 19 as practicable upon such Event of Default ceasing to exist. Without the prior written consent of the Collateral Agent (or its agent), no Grantor shall make or maintain any Deposit Account, Commodity Account or Securities Account except for the accounts set forth in Schedule IV hereto. Notwithstanding the foregoing, the provisions of this paragraph 5(i) shall not apply to Excluded Accounts or, until the date upon which the Discharge of Credit Facility Obligations has occurred, any Collateral consisting of Credit Facility Priority Collateral. (j) Motor Vehicles. (i) At the reasonable request of the Collateral Agent, each Grantor shall (a) cause all Motor Vehicles that constitute Collateral, now owned or hereafter acquired by any Grantor, which under applicable law are required to be registered, to be properly registered in the name of such Grantor, (b) cause all Motor Vehicles that constitute Collateral, now owned or hereafter acquired by any Grantor, the ownership of which under applicable law (including without limitation, any Motor Vehicle Law), is evidenced by a certificate of title or ownership, to be properly titled in the name of such Grantor, with the Collateral Agent's Lien noted thereon and (c) if requested by the Collateral Agent, deliver to the Collateral Agent (or its custodian) originals of all such certificates of title or ownership for such Motor Vehicles, with the Collateral Agent's Lien noted thereon. (ii) At the request of the Collateral Agent, upon the acquisition after the date hereof by any Grantor of any Motor Vehicle or other Equipment that constitutes Collateral subject to a certificate of title or ownership (other than a Motor Vehicle or Equipment to be acquired that is subject to a purchase money security interest permitted by Section 4.12 of the Indenture), such Grantor shall promptly notify the Collateral Agent of such acquisition, set forth a description of the Motor Vehicle or other Equipment acquired and a good faith estimate of the current value of such Motor Vehicle or Equipment, and if so requested by the Collateral Agent, promptly deliver to the Collateral Agent (or its custodian) originals of the certificates of title or ownership for such Motor Vehicle or Equipment, together with the manufacturer's statement of origin, and an application duly executed by the appropriate Grantor to evidence the Collateral Agent's Lien thereon. (iii) Subject to clauses (j)(i) and (j)(ii) above, each Grantor hereby appoints the Collateral Agent as its attorney-in-fact, effective the date hereof and terminating upon the termination of this Agreement, for the purpose of (A) executing on behalf of such Grantor title or ownership applications for filing with appropriate state or provincial agencies to enable Motor Vehicles that constitute Collateral, now owned or hereafter acquired by such Grantor, to be retitled and the Collateral Agent listed as lienholder thereof, and (B) filing such applications with such state or provincial agencies. This appointment as attorney-in-fact is coupled with an interest and is irrevocable until the date on which the Discharge of Senior Secured Note Obligations has occurred. (iv) Any certificates of title or ownership delivered pursuant to the terms hereof shall be accompanied by odometer statements for each Motor Vehicle covered thereby. 20 (v) So long as no Event of Default shall have occurred and be continuing, upon the request of any Grantor, the Collateral Agent shall execute and deliver to such Grantor such instruments as such Grantor shall reasonably request to remove the notation of the Collateral Agent as lienholder on any certificate of title for any Motor Vehicle; provided that any such instruments shall be delivered, and the release effective, only upon receipt by the Collateral Agent of a certificate from such Grantor, stating that the Motor Vehicle, the Lien on which is to be released, is to be sold or has suffered a casualty loss (with title thereto passing to the casualty insurance company therefor in settlement of the claim for such loss) and the amount that such Grantor will receive as sale proceeds or insurance proceeds. (k) Control. Each Grantor hereby agrees to take any or all action that the Collateral Agent may determine to be reasonably necessary or desirable in order for the Collateral Agent (or its agent) to obtain control in accordance with Sections 9-104, 9-105, 9-106, and 9-107 of the Code with respect to the following Collateral: (i) Deposit Accounts, (ii) Electronic Chattel Paper, (iii) Investment Property and (iv) Letter-of-Credit Rights; provided, however, that no such action shall be required with respect to any Collateral constituting Credit Facility Priority Collateral until on or after the date upon which the Discharge of Credit Facility Obligations has occurred. (l) Inspection and Reporting. Each Grantor shall permit the Collateral Agent, or any agents or representatives thereof or such professionals or other Persons as the Collateral Agent may reasonably designate subject to a confidentiality agreement reasonably satisfactory to the Company, upon reasonably prior notice and during normal business hours, (i) to examine and make copies of and abstracts from such Grantor's records and books of account, (ii) to visit and inspect its properties, (iii) to verify materials, leases, notes, Accounts, Inventory and other assets of such Grantor from time to time and (iv) to conduct audits, physical counts, appraisals and/or valuations, Phase I Environmental Site Assessments or examinations at the locations of such Grantor. (m) Partnership and Limited Liability Company Interest. No Grantor that is a partnership or a limited liability company shall, nor shall any Grantor with any Subsidiary that is a partnership or a limited liability company, permit such partnership interests or membership interests (excluding joint venture interests) to (i) be dealt in or traded on securities exchanges or in securities markets, (ii) become a security for purposes of Article 8 of any relevant Uniform Commercial Code, (iii) become an investment company security within the meaning of Section 8-103 of any relevant Uniform Commercial Code or (iv) be evidenced by a certificate; provided, however, (A) if any Grantor's joint venture interests become evidenced by a certificate, such Grantor shall receive such certificate in trust for the benefit of the Collateral Agent, shall segregate it from such Grantor's other property and shall deliver it forthwith to the Collateral Agent subject to the requirements set forth in the Pledge Agreement and (B) if such Grantor is not party to the Pledge Agreement, such Grantor shall immediately execute and deliver a joinder agreement and become a party to the Pledge Agreement. Each Grantor agrees that such partnership interests or membership interests (including, without limitation, any such interests in joint ventures that are not certificated) shall constitute General Intangibles. 21 SECTION 6. Additional Provisions Concerning the Collateral. (a) Each Grantor hereby (i) authorizes the Collateral Agent to file, one or more financing or continuation statements, and amendments thereto, relating to the Collateral (including, without limitation, any such financing statements that indicate the Collateral as "all assets" or words of similar import) and (ii) ratifies such authorization to the extent that the Collateral Agent has filed any such financing or continuation statements, or amendments thereto, prior to the date hereof. A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law. (b) Each Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact and proxy, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, and upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may take any action and execute any instrument which the Collateral Agent may deem reasonably necessary or advisable to accomplish the purposes of this Agreement (subject to the rights of a Grantor under Section 5 hereof), including, without limitation, (i) to ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys due and to become due under or in respect of any Collateral, (ii) to receive, endorse, and collect any drafts or other instruments, documents and chattel paper in connection with clause (i) above, (iii) to file any claims or take any action or institute any proceedings which the Collateral Agent may deem necessary or desirable for the collection of any Collateral or otherwise to enforce the rights of the Collateral Agent, the Trustee and the Holders with respect to any Collateral, and (iv) to execute assignments, licenses and other documents to enforce the rights of the Collateral Agent, the Trustee and the Holders with respect to any Collateral. This power is coupled with an interest and is irrevocable until the date on which the Discharge of Senior Secured Note Obligations has occurred. (c) For the purpose of enabling the Collateral Agent to exercise rights and remedies hereunder, at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Grantor hereby grants to the Collateral Agent, to the extent assignable, an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to any Grantor) to use, assign, license or sublicense any Intellectual Property now owned or hereafter acquired by any Grantor (excluding Intellectual Property that is subject to a License from third parties to the extent such License expressly prohibits any of the actions specified herein, unless otherwise subject to a consent, waiver or other agreement permitting the taking of such actions specified herein), wherever the same may be located, including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout thereof. Notwithstanding anything contained herein to the contrary, but subject to the provisions of the Indenture that limit the right of a Grantor to dispose of its property and Section 5(h) hereof, so long as no Event of Default shall have occurred and be continuing, each Grantor may exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other actions with respect to the Intellectual Property in the ordinary course of its business. In furtherance of the foregoing, unless an Event of Default shall have occurred and be continuing, the Collateral Agent shall from time to time, upon the request of a Grantor, execute and deliver any instruments, certificates or other documents, in the form so requested, which such Grantor shall 22 have certified are appropriate (in such Grantor's judgment) to allow it to take any action permitted above (including relinquishment of the license provided pursuant to this clause (c) as to any Intellectual Property). Further, upon the date on which the Discharge of Senior Secured Note Obligations has occurred, the Collateral Agent (subject to Section 11(e) hereof) shall release and reassign to the Grantors all of the Collateral Agent's right, title and interest in and to the Intellectual Property, and the Licenses, all without recourse, representation or warranty whatsoever and at the Grantor's sole expense. The exercise of rights and remedies hereunder by the Collateral Agent shall not terminate the rights of the holders of any licenses or sublicenses heretofore granted by any Grantor or theretofore granted by any Grantor in accordance with the second sentence of this clause (c). Each Grantor hereby releases the Collateral Agent from any claims, causes of action and demands at any time arising out of or with respect to any actions taken or omitted to be taken by the Collateral Agent under the powers of attorney granted herein other than actions taken or omitted to be taken through the Collateral Agent's gross negligence or willful misconduct, as determined by a final determination of a court of competent jurisdiction. (d) If any Grantor fails to perform any agreement contained herein, the Collateral Agent may itself perform, or cause performance of, such agreement or obligation, in the name of such Grantor or the Collateral Agent, and the expenses of the Collateral Agent incurred in connection therewith shall be jointly and severally payable by the Grantors pursuant to Section 8 hereof and shall be secured by the Collateral. (e) The powers conferred on the Collateral Agent hereunder are solely to protect its interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Collateral. (f) Anything herein to the contrary notwithstanding (i) each Grantor shall remain liable under the Licenses and otherwise with respect to any of the Collateral to the extent set forth therein to perform all of its obligations thereunder to the same extent as if this Agreement had not been executed, (ii) the exercise by the Collateral Agent of any of its rights hereunder shall not release any Grantor from any of its obligations under the Licenses or otherwise in respect of the Collateral, and (iii) the Collateral Agent shall not have any obligation or liability by reason of this Agreement under the Licenses or with respect to any of the other Collateral, nor shall the Collateral Agent be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. SECTION 7. Remedies Upon Default. In each case subject to the Intercreditor Agreement, if any Event of Default shall have occurred and be continuing: (a) The Collateral Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein or otherwise available to it, all of the rights and remedies of a secured party upon default under the Code (whether or not the Code applies to the affected Collateral), and also may (i) take absolute control of the Collateral, including, 23 without limitation, transfer into the Collateral Agent's name or into the name of its nominee or nominees (to the extent the Collateral Agent has not theretofore done so) and thereafter receive, for the benefit of the Collateral Agent, all payments made thereon, give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though it were the outright owner thereof, (ii) require each Grantor to, and each Grantor hereby agrees that it will at its expense and upon request of the Collateral Agent forthwith, assemble all or part of the Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a place or places to be designated by the Collateral Agent that is reasonably convenient to both parties, and the Collateral Agent may enter into and occupy any premises owned or leased by any Grantor where the Collateral or any part thereof is located or assembled for a reasonable period in order to effectuate the Collateral Agent's rights and remedies hereunder or under law, without obligation to any Grantor in respect of such occupation, and (iii) without notice except as specified below and without any obligation to prepare or process the Collateral for sale, (A) sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Collateral Agent's offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem commercially reasonable and/or (B) lease, license or dispose of the Collateral or any part thereof upon such terms as the Collateral Agent may deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale or any other disposition of the Collateral shall be required by law, at least ten (10) days' notice to a Grantor of the time and place of any public sale or the time after which any private sale or other disposition of the Collateral is to be made shall constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale or other disposition of Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Grantor hereby waives any claims against the Collateral Agent, the Trustee and the Holders arising by reason of the fact that the price at which the Collateral may have been sold at a private sale was less than the price which might have been obtained at a public sale or was less than the aggregate amount of the Senior Secured Note Obligations, even if the Collateral Agent accepts the first offer received and does not offer the Collateral to more than one offeree, and waives all rights that such Grantor may have to require that all or any part of the Collateral be marshalled upon any sale (public or private) thereof. Each Grantor hereby acknowledges that (i) any such sale of the Collateral by the Collateral Agent shall be made without warranty, (ii) the Collateral Agent may specifically disclaim any warranties of title, possession, quiet enjoyment or the like, and (iii) such actions set forth in clauses (i) and (ii) above shall not adversely effect the commercial reasonableness of any such sale of the Collateral. In addition to the foregoing, (i) upon written notice to any Grantor from the Collateral Agent, each Grantor shall cease any use of the Intellectual Property or any trademark, patent or copyright similar thereto for any purpose described in such notice; (ii) the Collateral Agent may, at any time and from time to time, upon ten (10) days' prior notice to any Grantor, license, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any of the Intellectual Property, throughout the universe for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (iii) the Collateral Agent may, at any time, pursuant to the authority granted in Section 6 hereof (such authority being effective upon the occurrence and during the continuance of an Event of Default), execute and deliver on behalf of a Grantor, one or more instruments of assignment of 24 the Intellectual Property (or any application or registration thereof), in form suitable for filing, recording or registration in any country. (b) Any cash held by the Collateral Agent as Collateral and all Cash Proceeds received by the Collateral Agent in respect of any sale of or collection from, or other realization upon, all or any part of the Collateral may, in the discretion of the Collateral Agent, be held by the Collateral Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Collateral Agent pursuant to Section 8 hereof) in whole or in part by the Collateral Agent against, all or any part of the Senior Secured Note Obligations in such order as the Collateral Agent shall elect, consistent with the provisions of the Indenture. Any surplus of such cash or Cash Proceeds held by the Collateral Agent and remaining after the date on which the Discharge of Senior Secured Note Obligations has occurred shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct. (c) In the event that the proceeds of any such sale, collection or realization are insufficient to pay all amounts to which the Holders of the Senior Secured Note Obligations are legally entitled, the Grantors shall be jointly and severally liable for the deficiency, together with interest thereon at the highest rate specified in any applicable Senior Secured Note Document for interest on overdue principal thereof or such other rate as shall be fixed by applicable law, together with the reasonable out-of-pocket costs of collection and the reasonable fees, costs, expenses and other client charges of any attorneys employed by the Collateral Agent to collect such deficiency. (d) Each Grantor hereby acknowledges that if the Collateral Agent complies with any applicable state, provincial or federal law requirements in connection with a disposition of the Collateral, such compliance will not adversely affect the commercial reasonableness of any sale or other disposition of the Collateral. (e) The Collateral Agent shall not be required to marshal any present or future collateral security (including, but not limited to, this Agreement and the Collateral) for, or other assurances of payment of, the Senior Secured Note Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of the Collateral Agent's rights hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights, however existing or arising. To the extent that any Grantor lawfully may, such Grantor hereby agrees that it will not invoke any law relating to the marshalling of collateral which might cause delay in or impede the enforcement of the Collateral Agent's rights under this Agreement or under any other instrument creating or evidencing any of the Senior Secured Note Obligations or under which any of the Senior Secured Note Obligations is outstanding or by which any of the Senior Secured Note Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, each Grantor hereby irrevocably waives the benefits of all such laws. SECTION 8. Indemnity and Expenses. (a) Each Grantor jointly and severally agrees to defend, protect, indemnify and hold harmless the Collateral Agent and the Trustee (and all of their respective officers, 25 directors, employees, attorneys, consultants and agents) from and against any and all claims, damages, losses, liabilities, obligations, penalties, fees and reasonable out-of-pocket costs and expenses (including, without limitation, reasonable legal fees, costs, expenses and disbursements of counsel for the Collateral Agent and the Trustee) to the extent that they arise out of or otherwise result from this Agreement (including, without limitation, enforcement of this Agreement), except claims, losses or liabilities resulting solely and directly from such Person's gross negligence or willful misconduct, as determined by a final judgment of a court of competent jurisdiction. (b) Each Grantor jointly and severally agrees to pay to the Collateral Agent upon demand the amount of any and all reasonable out-of-pocket costs and expenses of the Collateral Agent, including the reasonable fees, costs, expenses and disbursements of counsel for the Collateral Agent and of any experts and agents (including, without limitation, any collateral trustee which may act as agent of the Collateral Agent), which the Collateral Agent may incur in connection with (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment, waiver or other modification or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights of the Collateral Agent hereunder, or (iv) the failure by any Grantor to perform or observe any of the provisions hereof. SECTION 9. Notices, Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified mail, postage prepaid and return receipt requested), telecopied or delivered, if to a Grantor, to it in care of the Company at its address specified in the Indenture and if to the Collateral Agent, to it at U.S. Bank National Association, 425 Walnut Street, Cincinnati, Ohio 45202, Fax: (513)-632-5511, Attention: Corporate Trust Office; or as to any such Person, at such other address as shall be designated by such Person in a written notice to such other Person complying as to delivery with the terms of this Section 9. All such notices and other communications shall be effective (a) if mailed (by certified mail, postage prepaid and return receipt requested), when received or three (3) days after deposited in the mails, whichever occurs first, (b) if telecopied, when transmitted and confirmation received or (c) if delivered, upon delivery. SECTION 10. Security Interest Absolute. All rights of the Collateral Agent, the Trustee and the Holders, all Liens and all obligations of each of the Grantors hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Indenture or any other Senior Secured Note Document, (b) any change in the time, manner or place of payment of, or in any other term in respect of, all or any of the Senior Secured Note Obligations, or any other amendment or waiver of or consent to any departure from the Indenture or any other Senior Secured Note Document, (c) any exchange or release of, or non-perfection of any Lien on any Collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Senior Secured Note Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any of the Grantors in respect of the Senior Secured Note Obligations. All authorizations and agencies contained herein with respect to any of the Collateral are irrevocable and powers coupled with an interest. 26 SECTION 11. Miscellaneous. (a) No amendment of any provision of this Agreement (including any Schedule attached hereto) shall be effective unless it is in writing and signed by each Grantor and the Collateral Agent, and no waiver of any provision of this Agreement, and no consent to any departure by any Grantor therefrom, shall be effective unless it is in writing and signed by the Collateral Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. (b) No failure on the part of the Collateral Agent, the Trustee or the Holders to exercise, and no delay in exercising, any right hereunder or under any other Senior Secured Note Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The rights and remedies of the Collateral Agent, the Trustee or the Holders provided herein and in the other Senior Secured Note Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the Collateral Agent, the Trustee or the Holders under any Senior Secured Note Document against any party thereto are not conditional or contingent on any attempt by such Person to exercise any of its rights under any other Senior Secured Note Document against such party or against any other Person, including but not limited to, any Grantor. (c) Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction. (d) This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until the date on which the Discharge of Senior Secured Note Obligations has occurred and (ii) be binding on each Grantor and all other Persons who become bound as debtor to this Agreement in accordance with Section 9-203(d) of the Code and shall inure, together with all rights and remedies of the Collateral Agent, the Trustee or the Holders hereunder, to the benefit of the Collateral Agent, the Trustee or the Holders and their respective permitted successors, transferees and assigns. Upon any such assignment or transfer, all references in this Agreement to any such Collateral Agent, Trustee or Holders shall mean the assignee of Collateral Agent, the Trustee or the Holders. None of the rights or obligations of any Grantor hereunder may be assigned or otherwise transferred without the prior written consent of the Collateral Agent, and any such assignment or transfer shall be null and void. (e) Upon the date on which the Discharge of Senior Secured Note Obligations has occurred, this Agreement and the security interests created hereby shall terminate and all rights to the Collateral shall revert to the Grantors. Notwithstanding the foregoing, the Collateral Agent's Liens upon the Collateral shall automatically be released upon any of the events specified in Section 10.03 of the Indenture in accordance with the terms of the Indenture, and the Collateral of any Grantor that is released from its Note Guarantee obligations and is no longer a Guarantor pursuant to Section 11.05 of the Indenture shall automatically be released upon such an event in accordance with the terms of the Indenture, and such Grantor shall no longer be a party to this Agreement. In connection with any termination or release pursuant to this Section 27 11(e), the Collateral Agent will, upon any Grantor's request and at such Grantor's expense, without any representation, warranty or recourse whatsoever, (i) return to such Grantor such Collateral to be released (in the case of a release) as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and (ii) execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination or release. (f) THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. (g) ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT RELATED THERETO MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS THEREOF, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH GRANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION, SUIT OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. (h) EACH OF THE GRANTORS (AND BY ITS ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT, THE COLLATERAL AGENT) WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER SENIOR SECURED NOTE DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR OTHER ACTION OF THE PARTIES HERETO. (i) Each Grantor irrevocably consents to the service of process of any of the aforesaid courts in any such action, suit or proceeding by the mailing of copies thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Grantor at its address provided herein, such service to become effective ten (10) days after such mailing. 28 (j) Nothing contained herein shall affect the right of the Collateral Agent to serve process in any other manner permitted by law or commence legal proceedings or otherwise proceed against any Grantor or any property of any Grantor in any other jurisdiction. (k) Each Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding referred to in this Section any special, exemplary, punitive or consequential damages. (l) Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. (m) This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together constitute one in the same Agreement. Delivery of an executed counterpart of this Agreement by facsimile shall be equally effective as delivery of an original executed counterpart. (n) All of the obligations of the Grantors hereunder are joint and several. The Collateral Agent may, in its sole and absolute discretion, enforce the provisions hereof against any of the Grantors and shall not be required to proceed against all Grantors jointly or seek payment from the Grantors ratably. In addition, the Collateral Agent may, in its sole and absolute discretion, select the Collateral of any one or more of the Grantors for sale or application to the Senior Secured Note Obligations, without regard to the ownership of such Collateral, and shall not be required to make such selection ratably from the Collateral owned by all of the Grantors. The release or discharge of any Grantor by the Collateral Agent shall not release or discharge any other Grantor from the obligations of such Person hereunder. (o) The Collateral Agent acknowledges and agrees, on behalf of itself, the Trustee and the Holders, that, any provision of this Agreement to the contrary notwithstanding, (i) no Grantor shall be required to act or refrain from acting (A) in a manner that is inconsistent with the terms and provisions of the Intercreditor Agreement or (B) with respect to any Credit Facility Priority Collateral in any manner that would result in a default under the terms and provisions of any Credit Facility Document and (ii) any action required to be taken by a Grantor (or omission to act) pursuant to the terms of any Credit Facility Document in respect of Credit Facility Priority Collateral will not put such Grantor in violation of or result in a default under the terms of this Agreement or any other Senior Secured Note Document. (p) Notwithstanding any provision to the contrary contained herein, the terms of this Agreement, the Liens created hereby and the rights and remedies of the Collateral Agent, the Trustee and the Holders hereunder are subject to the terms of the Intercreditor Agreement. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 29 IN WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and delivered by its officer thereunto duly authorized, as of the date first above written. GRANTORS: MILACRON INC. By: /s/ Robert P. Lienesch ---------------------- Name: Robert P. Lienesch Title: Vice President - Finance and Chief Financial Officer EACH GRANTOR LISTED ON SCHEDULE A HERETO By: /s/ Robert P. Lienesch ---------------------- Name: Robert P. Lienesch Title: Treasurer EACH GRANTOR LISTED ON SCHEDULE B HERETO By: /s/ Robert P. Lienesch ---------------------- Name: Robert P. Lienesch Title: Vice President MILACRON INTERNATIONAL MARKETING COMPANY By: /s/ Robert P. Lienesch ---------------------- Name: Robert P. Lienesch Title: Treasurer and Assistant Secretary COLLATERAL AGENT: U.S. BANK NATIONAL ASSOCIATION By: /s/ Karolina K. Dies -------------------- Name: Karolina K. Dies Title: Trust Officer SCHEDULE A Milacron Marketing Company Northern Supply Company, Inc. Nickerson Machinery Chicago Inc. Pliers International, Inc. D-M-E U.S.A. Inc. D-M-E Manufacturing Inc. Uniloy Milacron Inc. Uniloy Milacron U.S.A. Inc. Milacron Industrial Products, Inc. Oak International, Inc. Cimcool Industrial Products Inc. Milacron Plastics Technologies Group Inc. SCHEDULE B Milacron Resin Abrasives Inc. D-M-E Company SECURITY AGREEMENT SCHEDULES SCHEDULE I LEGAL NAMES; STATES OR JURISDICTIONS OF ORGANIZATION; ORGANIZATIONAL IDENTIFICATION NUMBERS

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 1 of 64 TRADEMARKS Owner D-M-E Company (DME)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 2 of 64 TRADEMARKS Owner D-M-E Company (DME)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 3 of 64 TRADEMARKS Owner D-M-E Company (DME)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 4 of 64 TRADEMARKS Owner D-M-E Company (DME)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 5 of 64 TRADEMARKS Owner D-M-E Company (DME)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 6 of 64 TRADEMARKS Owner D-M-E USA Inc. (DMU)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 7 of 64 TRADEMARKS Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 8 of 64 TRADEMARKS Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 9 of 64 TRADEMARKS Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 10 of 64 TRADEMARKS Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 11 of 64 TRADEMARKS Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 12 of 64 TRADEMARKS Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 13 of 64 TRADEMARKS Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 14 of 64 TRADEMARKS Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 15 of 64 TRADEMARKS Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 16 of 64 TRADEMARKS Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 17 of 64 TRADEMARKS Owner Milacron Industrial Products Inc. (MIP)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 18 of 64 TRADEMARKS Owner Nickerson Machinery Chicago Inc. (NMI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 19 of 64 TRADEMARKS Owner Oak International Inc. (OI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 20 of 64 TRADEMARKS Owner Uniloy Milacron Inc. (UMI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 21 of 64 TRADEMARKS Owner Uniloy Milacron USA Inc. (UMU)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 22 of 64 TRADENAMES Tradenames Cimcool Industrial Products Inc. D-M-E Company D-M-E of Canada Limited D-M-E Manufacturing Inc. D-M-E U.S.A. Inc. Milacron Capital Holdings B.V. Milacron Canada Inc. Milacron Inc. Milacron Industrial Products, Inc. Milacron International Marketing Company Milacron Marketing Company Milacron Plastics Technologies Group Inc. Milacron Resin Abrasives Inc. Nickerson Machinery Chicago, Inc. Northern Supply Company, Inc. Oak International, Inc. Pliers International Inc. Progress Precision Inc. Uniloy Milacron Inc. Uniloy Milacron U.S.A. Inc. 2913607 Canada Limited 450500 Ontario Limited 528950 Ontario Limited

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 23 of 64 DOMAIN NAMES

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 24 of 64 DOMAIN NAMES

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS LICENSES Licensee/Licensor "MI" is Milacron Inc. "DME" is D-M-E Company "UNI" is Uniloy Milacron Inc. Page 25 of 64 TRADEMARK LICENSES LICENSE GRANTS

LICENSE RIGHTS

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 26 of 64 PATENTS - ------- Owner D-M-E Company (DME)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 27 of 64 PATENTS - ------- Owner D-M-E Company (DME)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 28 of 64 PATENTS - ------- Owner D-M-E Company (DME)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 29 of 64 PATENTS - ------- Owner D-M-E Company (DME)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 30 of 64 PATENTS - ------- Owner D-M-E Company (DME)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 31 of 64 PATENTS - ------- Owner D-M-E Company (DME)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 32 of 64 PATENTS - ------- Owner D-M-E Company (DME)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 33 of 64 PATENTS - ------- Owner D-M-E Company (DME)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 34 of 64 PATENTS - ------- Owner D-M-E USA Inc. (DMU)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 35 of 64 PATENTS - ------- Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 36 of 64 PATENTS - ------- Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 37 of 64 PATENTS - ------- Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 38 of 64 PATENTS - ------- Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 39 of 64 PATENTS - ------- Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 40 of 64 PATENTS - ------- Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 41 of 64 PATENTS - ------- Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 42 of 64 PATENTS - ------- Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 43 of 64 PATENTS - ------- Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 44 of 64 PATENTS - ------- Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 45 of 64 PATENTS - ------- Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 46 of 64 PATENTS - ------- Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 47 of 64 PATENTS - ------- Owner Milacron Inc. (MI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 48 of 64 PATENTS - ------- Owner Milacron Industrial Products Inc. (MIP)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 49 of 64 PATENTS - ------- Owner Oak International Inc. (OI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 50 of 64 PATENTS - ------- Owner Uniloy Milacron Inc. (UMI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 51 of 64 PATENTS - ------- Owner Uniloy Milacron Inc. (UMI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 52 of 64 PATENTS - ------- Owner Uniloy Milacron Inc. (UMI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 53 of 64 PATENTS - ------- Owner Uniloy Milacron USA Inc. (UMU)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 54 of 64 PATENTS - ------- Owner Uniloy Milacron USA Inc. (UMU)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 55 of 64 PATENTS - ------- Owner Uniloy Milacron USA Inc. (UMU)

Licensee/Licensor "MI" is Milacron Inc. "MPTG" is Milacron Plastics Technology Group Inc. "DME" is D-M-E Company "UNI" is Uniloy Milacron Inc. SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS LICENSES Page 56 of 64 PATENT LICENSES LICENSE GRANTS

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 59 of 64 COPYRIGHTS (U.S. REGISTRATIONS) Owner Uniloy Milacron Inc. (UMI)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 60 of 64 COPYRIGHTS (U.S. REGISTRATIONS)

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 61 of 64 COPYRIGHTS (U.S. REGISTRATIONS)

Licensee/Licensor "MI" is Milacron Inc. SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 62 of 64 COPYRIGHT LICENSES LICENSE RIGHTS

Software Licenses LICENSE RIGHTS

SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 63 of 64 CLAIMS & WRITTEN NOTICES Amway In a letter dated 8 December 1999, Amway Corporation gave notice to UNILOY of Amway's belief that use of some or all of the equipment supplied by UNILOY could be of interest in respect of patents that the Lemelson Foundation asserted were infringed by Amway and notice of UNILOY's duty of indemnification in respect of that equipment. The patents asserted are characterized as relating to bar coding and machine vision. By written notice dated 23 August 2000, Amway notified UNILOY that a complaint had been filed against Amway in respect of the assertion by the Lemelson Foundation. UNILOY has not identified any bar coding or machine vision equipment supplied to Amway. A written request was made to Amway 13 September 2000 for information concerning any equipment supplied to Amway by UNILOY on which Amway based their request for indemnification. There has been no correspondence in this matter since the written request of 13 September 2000. The suit by the Lemelson Foundation against Amway and others was stayed 5 January 2001 pending resolution of an action by Symbol Technologies and others against the Lemelson Foundation and concerning patents asserted against Amway. By decision 23 January 2004 fourteen patents asserted against Amway were held invalid in the Symbol Technologies litigation. Solaia Technology LLC. In a letter dated 3 June 2003, counsel for Solaia Technology LLC ("Solaia") asserted the likelihood of infringement of U.S. Patent 5,038,318 by Milacron's use of systems comprising programmable controllers connected via network to a computer. Solaia's counsel was informed by letter 18 July 2003 that no systems as described by Solaia's counsel had been identified in Milacron facilities and requested that Solaia's counsel provide any contrary information known to them without delay. Solaia's counsel has provided no information regarding any systems of Milacron upon which an accusation of infringement may be based, but has stated that it will be investigating further. Superbolt Inc. UNILOY received written notice dated 8 February 2000 from Superbolt Inc. of their patent pertaining to certain tie-bar nuts used by UNILOY. UNILOY's use of the accused devices has been limited, and estimated exposure is less than $10,000. Following the original notice from Superbolt, discussions were had between principals of both Superbolt and Uniloy in April of 2000 to resolve the matter. A final proposal expected from Superbolt to resolve the claim has not been received. The asserted patent expired 18 November 2003. Graham Engineering Suit was brought by Milacron Inc. in US District Court (filed October 2002, served December 2002) against Graham Engineering Corporation alleging infringement of Milacron's U.S. patent 5,062,052 relating to computer based controls for plastic molding machines. Graham is both a manufacturer and an importer (products of Hesta of Germany) of blow molding machinery. In December 2003 the court issued its ruling on interpretation of the asserted patent and ordered court-supervised mediation. No resolution has been reached through mediation. Graham filed summary judgment motions 13 February 2004 seeking rulings that the accused products do not infringe the asserted patent and that the asserted patent is invalid. SCHEDULE II INTELLECTUAL PROPERTY AND LICENSES; TRADEMARKS Page 64 of 64 CLAIMS & WRITTEN NOTICES Metalloid. Suit was brought in the Circuit Court for the County of Huntington (IN) 16 October 2002 by Oak International Inc. for trade secret misappropriation and unfair competition by Metalloid Corporation (Huntington, IN) and two former Oak employees. The suit seeks damages and injunctive relief. Claims against individual defendants of Oak and Milacron have been dismissed as well as Oak's claim for unfair competition. A hearing on Oak's motion for a preliminary injunction and Metalloid's motion for summary judgment that certain Oak information does not qualify as trade secrets was held 4 February 2004; no ruling has been made on the motions. A mediation session requested by Metalloid was held 2 April 2004. No resolution of the dispute was agreed. SCHEDULE III LOCATIONS OF GRANTORS CHIEF EXECUTIVE OFFICES

OTHER PLACES OF BUSINESS

LOCATION OF BOOKS AND RECORDS

LOCATIONS WITH CHATTEL PAPER, INVENTORY, GOODS, EQUIPMENT AND/OR FIXTURES

SCHEDULE IV DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITIES ACCOUNTS

- ----------------------- (1) This is an "Excluded Deposit Account" (as defined in the Security Agreement). (2) This is an "Excluded Deposit Account" (as defined in the Security Agreement). SCHEDULE V UCC FINANCING STATEMENTS UCC Financing Statements have been filed in the jurisdictions below against the Grantors:

SCHEDULE VI COMMERCIAL TORT CLAIMS 1. MILACRON INDUSTRIAL PRODUCTS, INC. and MILACRON INC. vs. LAWRENCE A. FRANKS, NEWELL A. FRANKS, and FRED E. EDWARDS Suit brought in the Circuit Court for the County of St. Joseph, Michigan (filed on or about January 14, 2003) against the three individuals who sold Oak International, Inc. to Milacron alleging breach of a covenant of non-competition contained in the Stock Purchase Agreement and fraud related to the non-disclosure of an entity in Italy utilizing formulations of Oak International, Inc. 2. OAK INTERNATIONAL, INC. v. METALLOID CORPORATION, ET AL. Suit was brought in the Circuit Court for the County of Huntington (IN) 16 October 2002 by Oak International Inc. for trade secret misappropriation and unfair competition by Metalloid Corporation (Huntington, IN) and two former Oak International, Inc. employees. The suit seeks damages and injunctive relief. Claims against individual defendants of Oak International, Inc. and Milacron Inc. have been dismissed as well as Oak International Inc.'s claim for unfair competition. The court has granted Metalloid's request for mediation. A scheduled mediation took place on 2 April 2004 but did not result in the resolution of this matter. A hearing on Oak International Inc.'s motion for a preliminary injunction and Metalloid's motion for summary judgment that certain Oak International Inc. information does not qualify as trade secrets was held 4 February 2004; no ruling has been made on the motions. 3. MILACRON INC. v. GRAHAM ENGINEERING CORPORATION A/K/A GRAHAM MACHINERY GROUP AND HOLLO PLASTICS EQUIPMENT, INC. Suit was brought in US District Court for the Northern District of Ohio, Eastern Division (filed October 2002, served December 2002) against Graham Engineering Corporation alleging infringement of Milacron Inc.'s U.S. patent 5,062,052 relating to computer based controls for plastic molding machines. Graham is both a manufacturer and an importer (products of Hesta of Germany) of blow molding machinery. In December 2003 the court issued its ruling on interpretation of the asserted patent and ordered court-supervised mediation. No resolution has been reached through mediation. Graham filed summary judgment motions 13 February 2004 seeking rulings that the accused products do not infringe the asserted patent and that the asserted patent is invalid. EXHIBIT A IP SECURITY AGREEMENT [TRADEMARK][PATENT][COPYRIGHT] SECURITY AGREEMENT [TRADEMARKS] [PATENTS] [COPYRIGHTS] [TRADEMARK][PATENT][COPYRIGHT] SECURITY AGREEMENT ("Agreement"), dated June___, 2004, is made by _____________, a ________corporation, located at _________________ (the "Assignor") in favor of U.S. Bank National Association, a _______________, located at _______________________, as Collateral Agent (in such capacity, together with any permitted successors and assigns, "Assignee"). Capitalized terms used in this Agreement and not defined herein have the meanings set forth for such terms in the Security Agreement (as hereinafter defined). WHEREAS, Assignor is [the applicant or registrant for the trademarks and service marks listed on the annexed Schedule 1A hereto, which trademarks and service marks are registered or applied for in the United States Patent and Trademark Office (the "Trademarks")] [the patentee or applicant for the utility patents, design patents, and patent applications listed on the annexed Schedule 1A, which patents are issued or applied for in the United States Patent and Trademark Office (the "Patents")][the applicant or registrant for the copyrights listed on the annexed Schedule 1A, which copyrights are registered in the United States Copyright Office (the "Copyrights")]; WHEREAS, the Assignor has entered into a Security Agreement, dated June____, 2004, among Assignor [and the other grantors signatory thereto], and Assignee (as amended, restated, supplemented or otherwise modified from time to time, the "Security Agreement"); WHEREAS, pursuant to the Security Agreement, as collateral security for all of the Obligations, Assignor has pledged and assigned to Assignee, and granted to Assignor, for the benefit of the Agents and the Lenders (as such terms are defined in the Security Agreement) a continuing security interest in the [Trademarks, together with, among other things, the goodwill of the business symbolized by and associated with the Trademarks], [Patents], [Copyrights] and the applications and registrations thereof, and all proceeds thereof (the "Collateral"); NOW, THEREFORE, in consideration of the premises and agreements made herein and in the Security Agreement, as collateral security for all of the Obligations, Assignor hereby pledges and assigns to the Assignee, and grants to the Assignee, for the benefit of the Agents and the Lenders, a continuing security interest in the Collateral. Assignor does hereby further acknowledge and affirm that the rights and remedies of the Assignee with respect to the Collateral are more fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully set forth herein. IN WITNESS WHEREOF, the Assignor has caused this Agreement to be executed and delivered by its officer thereunto duly authorized as of the date above first written. [GRANTOR] By:______________________________________ Name: Title: STATE OF ____________ ss.: COUNTY OF __________ On this ____ day of June, 2004, before me personally came ________________, to me known to be the person who executed the foregoing instrument, and who, being duly sworn by me, did depose and say that s/he is the ________________ of _______________________________________, a ____________________, and that s/he executed the foregoing instrument in the name of _______________________________________, and that s/he had authority to sign the same, and s/he acknowledged to me that he executed the same as the act and deed of said entity for the uses and purposes therein mentioned. _____________________________ Notary Public SCHEDULE 1A TO [TRADEMARK][PATENT][COPYRIGHT] SECURITY AGREEMENT [Trademark Registrations and Trademark Applications] [Patents and Patent Applications] [Copyright Registrations and Copyright Applications]