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Exhibit10(kk)
March 25, 2005
Kenneth R. Rieth
President
Riviera Tool Company
5460 Executive Parkway S.E.
Grand Rapids, Michigan 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, A SECOND AMENDMENT DATED
DECEMBER
22, 2004, A THIRD AMENDMENT DATED JANUARY 6, 2005, A FOURTH
AMENDMENT
DATED JANUARY 24, 2005, A FIFTH AMENDMENT DATED FEBRUARY 9, 2005,
A
SIXTH AMENDMENT DATED FEBRUARY 17, 2005 AND A SEVENTH AMENDMENT
DATED
MARCH 17, 2005 (AS AMENDED, "FORBEARANCE AGREEMENT")
Dear Mr. Rieth:
Borrower has requested that Bank amend the
Forbearance Agreement.
Subject to timely, written acceptance by
Borrower of the following conditions in
this eighth amendment to the Forbearance
Agreement ("Eighth Amendment"), and the
additional acknowledgment required below,
Bank is willing to continue to forbear
until April 29, 2005, subject to earlier
termination as provided below, from
further action to collect the
Liabilities:
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SUPERSEDED, AMENDED, MODIFIED OR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 EIGHTH AMENDMENT OR ARE
INCONSISTENT WITH THIS EIGHTH AMENDMENT,
THEN THIS EIGHTH AMENDMENT SHALL
GOVERN.
BORROWER ACKNOWLEDGES BANK IS UNDER NO
OBLIGATION TO ADVANCE FUNDS OR EXTEND
CREDIT TO BORROWER UNDER THE LOAN
DOCUMENTS, OR OTHERWISE. 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 EIGHTH 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
APRIL 29, 2005.
Effective immediately, the maximum amount available under the Line
of
Credit Note is $3,750,000.
The "Formula Amount" is 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)
the
lesser of (i) $1,350,000 or (ii) 35% of WIP (defined below)
(but
excluding WIP for R. J. Tower, Inc. or any of its affiliates or
subsidiaries ("Tower"), Oxford, Mercedes and/or Gestamp); less
(c)
$205,000 until March 31, 2005. "WIP" means work in process,
calculated
based on cost, net of progress payments received from any one
customer,
and excludes (x) inventory that has been delivered to a customer,
(y)
advance billings,
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on a customer basis, in excess of cost and (z) outsourced or
subcontracted inventory that is not in Borrower's possession or
not
paid for by Borrower. Accounts owing by Benteler de Mexico that
are
otherwise Eligible Accounts, shall be included in determining
the
Formula Amount. Accounts owed by Oxford Automotive, Inc.
("Oxford")
Mercedes-Benz U.S. International, Inc. ("Mercedes") or Gestamp
Alabama
("Gestamp") shall not be included in Eligible Accounts. Except
for
those Accounts owing as of February 8, 2005, Accounts owed by
Tower
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. Each borrowing request must be
accompanied
by an accounts receivable report, in form satisfactory to Bank,
with a
minimum of one report per week. In addition, Borrower will provide
to
Bank weekly a WIP report, in form satisfactory to Bank. Each
report
shall also include a detailed list of current ineligible accounts
and a
statement of those ineligible accounts collected.
THE HILLSTREET FUND II, L.P.
("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 TH
