VARIATION AGREEMENT TO AN ASSET BASED FINANCE AGREEMENT

Exhibit 10.5

Hammonds LLP

7 Devonshire Square  London  EC2M 4YH   DX 136546 Bishopsgate 2

Telephone +44 (0)20 7655 1000   Fax +44 (0)20 7655 1001

Website  www.hammonds.com

Reference MED/LLO.200-0141

CONTENTS

1

CONDITION PRECEDENT

3

2

INTERPRETATION

3

3

VARIATIONS

3

4

VARIATIONS TO ALL DOCUMENTS

6

5

NOTICES

7

6

STATUS OF AGREEMENT

10

7

COUNTERPARTS

10

8

EXPENSES

10

9

GOVERNING LAW AND JURISDICTION

11

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2009 Deed of Variation (v13-0 0044316403)

INTRODUCTION

A

This Agreement is supplemental to and varies the terms of an Asset Based Finance Agreement dated 12 March 2008 and made between the parties hereto as the same may be novated, varied, replaced or added to from time to time (the " Finance Agreement ").

B

Certain affiliated entities of the Clients, incorporated in the United States of America (“ U.S.A. ”), Canada and the Netherlands have made certain Chapter 11 filing in accordance with local legislation in the U.S.A. In addition, the Clients breached certain financial covenants as per Schedule 2 of the Finance Agreement (each a “ Financial Covenant ”). The Clients have requested that the Lenders do not treat the making of such filings as a Termination Event for the time being.

C

From the date of this Agreement, the sum of one million two hundred and fifty one thousand Euro (€1,251,000) (the “Escrow Amount ”) will be held in escrow by DLA Piper UK LLP in accordance with the terms of an escrow letter, dated on or about the date hereof and setting out the instructions of Milacron BV and Lloyds TSB CF to DLA Piper UK LLP in this regard (the “ Escrow Letter ”).  This amount comprises four instalments of two hundred and seventy nine thousand Euro (€279,000), three of which have already been deducted as a reserve against Cimcool Europe’s available collateral, and the first monthly instalment of one hundred and thirty five thousand Euro (€135,000) payable on 30 April 2009 pursuant to Clause 2.2 of the Finance Agreement (the “Outstanding Property Payments ”).

D

DLA Piper UK LLP are irrevocably instructed by the Clients and the Lenders to pay the Escrow Amount to Lloyds TSB CF, without deduction, set off, or withholding, to be applied to the Facilities at the absolute discretion of Lloyds TSB CF, as more particularly set out in the Escrow Letter as soon as is reasonably practicable following the expiry of 30 days from the 22 April 2009 (the " Escrow Period ").  

E

Whilst reserving its rights pursuant to the Financing Documents, it is the intention of Lloyds TSB CF once the Escrow Letter has been entered into by all parties thereto and DLA Piper UK LLP have received the Escrow Amount and have confirmed that it is being held in accordance with the terms of the Escrow Letter:

(i)

to remove the reserve currently held against the available collateral of Cimcool Europe in respect of the amounts due but not paid under the Property Facility Agreement totalling eight hundred and thirty seven thousand Euro (€837,000) and the Termination Fee not paid of two hundred and seventy thousand Euro (€270,000, together improving working capital headroom by one million one hundred and seven thousand Euro (€1,107,000);

(ii)

not to make any such reserve against the available collateral of Cimcool Europe in connection with the payment of two hundred and seventy thousand Euro (€270,000) that fell due under the Property Facility on 31 March 2009, improving working capital headroom by this amount;

(iii)

to extend the Funding period for Cimcool Europe’s French and Italian receivables from 120 days to 150 days from the date of invoice, allowing additional headroom estimated at three hundred thousand Euro (€300,000);

(iv)

to allow increase in the Advance Rate to 90% in respect of Cimcool

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Europe and Cimcool Industrial Products and to 85% in respect of D-M-E for an initial period to 31 July 2009;

(v)

not to exercise its rights pursuant to the occurrence of the Termination Events referred to in B above for an initial period to 31 July 2009, provided that the Clients adhere at all times to the terms of the Agreement; and

(vi)

not to exercise its rights in relation to the non-payment of the Outstanding Property Payments during the Escrow Period, save where the Lenders are taking wider enforcement action or enforcing all or any part of their security.

F.

The parties hereto wish to record their agreement on various issues relating to the variation to the terms of the Finance Agreement and certain Financing Documents, following the occurrence of the Termination Events.

IT IS HEREWITH AGREED THAT:

1

CONDITION PRECEDENT

The terms set out in this Agreement are subject to Escrow Amount being received and held by DLA Piper UK LLP in accordance with the terms of the Escrow Letter and confirming the same to the Lenders.

2

INTERPRETATION

2.1

In this Agreement, capitalised terms (unless otherwise defined) shall have the meanings given to them in the Finance Agreement.

2.2

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

2.3

Headings are inserted for ease of reference only and shall be ignored in the construction of this Agreement.

2.4

Words denoting the singular shall include the plural and vice versa.

2.5

All words and expressions defined in the Finance Agreement shall bear the same meanings where used in this Agreement unless the context otherwise requires.

2.6

The Introduction shall form a part of this Agreement.

3

VARIATIONS

3.1

With immediate effect upon the execution and delivery of this Agreement (save where expressly stated to the contrary), the Finance Agreement shall be deemed to be amended as follows:

3.2

With effect from 1 April 2009, Clause 2.1 of the Finance Agreement shall be deemed deleted and replaced with the following expression:

“The maximum aggregate amount to be made available to the Clients pursuant to the

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2009 Deed of Variation (v13-0 0044316403)

Facilities (the " Facility Amount ") shall be fourteen million seven hundred and sixty nine thousand euros (€14,769,000) at any time outstanding on a revolving basis.”

3.3

With effect from 1 April 2009, Clause 2.2 of the Finance Agreement shall be deemed deleted and replaced with the following expression:

“The Property Facility Limit shall be an amount of eight million and sixty nine thousand euros (€8,069,000) and shall thereafter reduce in 59 equal monthly amounts of one hundred and thirty five thousand Euro (€135,000) with the first such payment to be made on 30 April 2009 followed by a single final payment of one hundred and four thousand Euro (€104,000).  The Facility Amount shall decrease monthly by an equal amount to such reduction of the Property Facility Limit, save where expressly varied by agreement between the parties.”

3.4

With effect from 1 April 2009, Clause 2.4 of the Finance Agreement shall be deemed deleted and replaced with the following expression:

“All of the Facilities must be finally repaid on 30 April 2014 (the “ Final Repayment Date ”) or the immediately next followi