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Exhibit10(jj)
January 6, 2005
Mr. Kenneth R. Rieth
President
Riviera Tool Company
5460 Executive Parkway S.E.
Grand Rapids, MI 49512-5507
RE: FORBEARANCE
AGREEMENT AMONG COMERICA BANK ("BANK") AND RIVIERA TOOL
COMPANY ("BORROWER") DATED NOVEMBER 16, 2004, AS AMENDED BY A
FIRST
AMENDMENT DATED DECEMBER 15, 2004 AND A SECOND AMENDMENT DATED
DECEMBER
22, 2004 (AS AMENDED, "FORBEARANCE AGREEMENT")
Dear Mr. Rieth:
Borrower has requested that Bank extend its
forbearance under the Forbearance
Agreement to March 15, 2005.
Subject to timely, written acceptance by
Borrower of the following conditions in
this third amendment to the Forbearance
Agreement ("Third Amendment"), and the
additional acknowledgment required below,
Bank is willing to continue to forbear
until March 15, 2005, subject to earlier
termination as provided below, from
further action to collect the
Liabilities:
1) Future
administration of the Liabilities and the financing
arrangements
between Bank and
Borrower shall continue to be governed by the covenants,
terms and conditions
of the Forbearance Agreement and the other Loan
Documents, which are
ratified and confirmed and incorporated by this
reference, except to
the extent that the Forbearance Agreement and the other
Loan Documents have
been superseded, amended, modified or supplemented by
this Third Amendment
or are inconsistent with this Third Amendment, then
this Third Amendment
shall govern.
2) Borrower
acknowledges Bank is under no obligation to advance funds or
extend credit to
Borrower under the Loan Documents, or otherwise.
3) 100% of Borrower's
cash inflows will continue to be applied to the Line
of Credit Note.
Subject to maintaining an advisory "Formula Amount" (defined
below) equal to or
greater than the balance owing on the Line of Credit Note
(plus the amount of
outstanding letters of credit), and provided there are
no defaults under the
terms of the Forbearance Agreement as amended by this
Third Amendment, and
no further defaults under the other Loan Documents,
Bank may, in its sole
discretion, continue to advance to Borrower under the
Line of Credit Note,
in accordance with the Loan Documents, through March
15, 2005. Effective
immediately, the maximum amount available under the Line
of Credit Note is
$5,000,000. Effective as of January 28, 2005, the maximum
amount available under
the Line of Credit Note will be reduced to
$4,000,000. The
"Formula Amount" is as defined as follows: as of the date of
any determination, the
sum of: (a) eighty percent (80%) of Eligible Accounts
Receivable, less than 120 days
past invoice, plus; (b) eighty percent (80%)
of Retention Billings
less than 180 days past invoice for Drive Automotive,
that are related to
the Mercedes BR-164 and BR-251 Programs; plus (c) an
overformula equal to
the lesser of (i) the amount owing to Borrower by
Mercedes-Benz U. S.
International, Inc. as assignee of Oxford Automotive,
Inc. ("Oxford") from
time to time based on invoices dated prior to December
17, 2004 and (ii)
$3,094,947, provided, however, that the maximum amount
included in the
Formula Amount under this subparagraph (c) will reduce
permanently to
$300,000 on January 28, 2005 and to zero ($0) on February 25,
2005, in both cases,
to the extent not already reduced by the payment of
amounts owing by
Mercedes-Benz; plus (d) an additional overformula equal to
$400,000 until
February 18, 2005, at which time such additional overformula
shall reduce
permanently to $200,000 until February 25, 2005, at which time
it shall reduce
permanently to zero ($0). Accounts owing by Benteler de
Mexico that are
otherwise Eligible Accounts, shall be included in
determining the
Formula Amount. Accounts
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owed by Oxford shall
not be included in Eligible Accounts. All previous
definitions of Advance
Formula or Formula Amount are superceded by the
foregoing. In the
event the balance on the Line of Credit Note (plus the
amount of outstanding
letters of credit) exceeds the Advance Formula at any
time, no advances will
be allowed. Effective immediately, there shall be no
availability to
Borrower for letters of credit except for the currently
outstanding letters of
credit. Each borrowing request must be accompanied by
an accounts receivable
report, in form satisfactory to Bank, with a minimum
of one report per
week. Each report shall also include a detailed list of
current ineligible
accounts and a statement of those ineligible accounts
collected.
4) Upon execution of
this Third Amendment, Borrower will pay to Bank a fully
earned, non-refundable
fee of $25,000.
5) Notwithstanding
Borrower's default under the Loan Documents, subject to
HillStreet's execution
of this Third Amendment as provided below, Bank
consents to Borrower's
payment to The HillStreet Fund II, L.P.
("HillStreet"), and
any other holders of Subordinated Debt (only as defined
in that certain Senior
Subordination Agreement ("Subordination Agreement")
among Bank, Borrower
and HillStreet dated July 9, 2004) of $105,000 due on
December 31, 2004
under the Subordinated Loan Documents (as defined in the
Subordination
Agreement). HillStreet, by its signature below, (a) represents
and warrants to Bank
that it is the only holder of Subordinated Debt, (b)
consents to and
acknowledges the terms of the Forbearance Agreement, as
amended by this Third
Amendment and (c) agrees to forbear from exercising
any rights or remedies
against Borrower or its assets until the termination
of Bank's forbearance
under t
