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EXHIBIT 10(k)
ASSIGNMENT OF CLAIM
THIS ASSIGNMENT ("ASSIGNMENT") is made effective as of March 3, 1997,
by Xxxxxxx X. Xxxxx ("Xxxxx"), Xxxxxx Xxxxx Xxxxxx ("Xxxxxx"), Riviera Holding
Company, a Michigan corporation ("Holding") and Riviera Tool Company, a Michigan
corporation, successor by merger to the interests of Riviera Die & Tool, Inc.
("Riviera", and together with Xxxxx, Xxxxxx and Holding, collectively
"Assignors"), in favor of NBD Bank whose address is 000 Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000 ("Assignee").
RECITALS
A. New Leap Corporation, Leap Technologies, Inc. and Riviera Plastic
Company ("Debtors") are currently indebted to Assignee in the amount of
$1,964,642.54 plus interest accruing from and after February 26, 1997 together
with all costs and expenses (including attorney fees), and all other present
and future obligations of Debtors to Assignee, direct or indirect, of every
kind or nature (the "New Leap Obligations").
B. To secure the New Leap Obligations, Xxxxx pledged 100% of the stock
of Holdings and Holdings pledged 50% of the stock of Riviera (the "Pledges").
C. Riviera has advised NBD that it intends to make an Initial Public
Offering of approximately 1,100,000 shares of the stock of Riviera (the "IPO")
to substantially improve the capital structure of Riviera. In addition,
Riviera has received a commitment from LaSalle National Bank ("LaSalle") to
provide certain financing to replace the current financing provided by
Assignee to Riviera which, together with the proceeds of the IPO, will be used
to pay all of Riviera's obligations to Assignee in full.
D. Rieth, Morris, Holding and Riviera have represented to Assignee
that the IPO and refinancing by LaSalle are in the best interest of Assignors
and that Assignee must release the Pledges for the IPO to proceed and the
replacement financing from LaSalle to close.
E. In consideration for Assignee's release of the Pledges, Assignors
have, among other things, proposed to assign all of their right, title and
interest in and to all proceeds of the Claim (as hereinafter defined) against
Durametallic Corporation, Xxxx X. Xxxxxxx and Xxxxxxx Xxxxxx.
F. Assignors represent and warrant to Assignee that they will receive
direct and substantial economic benefit from the IPO, the refinancing by
LaSalle, the release of the Pledges and the execution of a certain Settlement
and Forbearance Agreement dated February 26, 1997 among Xxxxx, Holding and
Assignee (the "Forbearance Agreement").
G. As a result of this Assignment, the Claim will secure the
obligations of Xxxxx under the Forbearance Agreement, the Xxxxx Note and the
Xxxxx Guaranty (as defined in the Forbearance Agreement) and related documents
executed in connection with the Forbearance Agreement.
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Based on the foregoing recitals (which are incorporated in this Agreement
and shall constitute representations, warranties and covenants of the
Assignors), and for other good and valuable considerations, the parties hereto
agree as follows:
AGREEMENT
1. Assignment. Assignors, jointly and severally, hereby assign and grant
Assignee a continuing security interest in all of each Assignors right, title
and interest in and to all proceeds (including, but not limited to, a money
judgment or other monetary award and other tangible property) of any and all
claims, whether now existing or hereafter arising, that any of them may have
against Durametallic Corporation, Xxxx X. Xxxxxxx and Xxxxxxx Xxxxxx including,
but not limited to, any proceeds pursuant to settlement, judgement or otherwise
resulting from Kent County Circuit Court Case No. 94-2809-CZ, Xxxxxxx X. Xxxxx,
Xxxxxx Xxxxxx, Riviera Holding Company and Riviera Die & Tool, Inc. (now know
as Riviera Tool Company), Durametallic Corporation, Xxxx X. Xxxxxxx and Xxxxxxx
Xxxxxx (the "Claim"), to secure payment of the Xxxxx Guaranty and the Xxxxx
Note (as defined in the Forbearance Agreement).
2. Consultation and Consent of Assignee. Assignors have agreed to advise
Assignee regarding all offers of settlement or compromise of the Claim.
Assignors further agree not to settle and/or compromise the Claim without the
prior written consent of Assignee. Assignors will at all times take any and
all steps necessary to pursue the Claim to its conclusion, to pay all costs
associated with realizing upon the Claim, to provide any and all support,
documents information, consultation and testimony necessary to fully and
completely pursue the Claim to its conclusion including any post-judgment
collection and appellate efforts and to at all times preserve their rights in
and to the same and all of the benefits, privileges and distributions related
thereto.
3. Additional Documentation. Assignors shall execute and deliver all such
documents and agreements and to undertake all acts required by Assignee to
achieve the intents and purposes of this Assignment.
4. Additional Representations. Assignors or any one or more of them has not
assigned all or any portion of the Claim to any other person or entity and
their respective rights in and to the Claim are free and clear of any lien,
encumbrance or security interest of any kind or nature. Further, Assignors or
any one or more of them shall not assign or pledge or grant any lien,
encumbrance or security interest in the Claim to any other person or entity.
5. Reports. Assignors shall provide, or cause to be provided by counsel to
Assignors, Assignee with a detailed written report of the status of the Claim
on the first day of each month commencing March 1, 1997. Additionally,
Assignors shall promptly report any and all pending dates in any litigation
related to the Claim and of any material events or occurrences related
thereto. Assignee shall be permitted to discuss with and seek written
information from Assignors' counsel at any time and Assignors' counsel is
hereby authorized to provide any information so requested by Assignee.
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6. Payment of Proceeds. Until the Xxxxx Guaranty is paid, satisfied
and/or performed in full, all amounts due or payable to Assignors on the Claim
shall be paid to Assignee, net only of the fees to be paid to their counsel
Dickinson, Wright, Moon, Van Dusen & Xxxxxxx in accordance with the terms of a
letter agreement dated June 4, 1994 (the "Xxxxxxxxx Fees") but not net of the
tax consequences of the outcome of such litigation (the "Net Proceeds"). Prior
to payment of the Xxxxxxxxx Fees, Assignors shall provide Assignee with a
detailed written breakdown of any proposed payment of the Xxxxxxxxx Fees for
approval. Further, Assignors may not change the Xxxxxxxxx Fees without the
prior written consent of Assignee. Assignee shall have the right to receive
any and all Net Proceeds. Additionally, the defendants are authorized,
permitted and directed to make any payment of Net Proceeds directly to Assignee.
7. Cumulative Rights. The rights and remedies of Assignee under this
Assignment are cumulative and are not in lieu of, but in addition to, any other
rights and remedies Assignee shall have under this agreement, the Forbearance
Agreement or applicable law. No change, amendment, modification, cancellation
or discharge hereof, or any party hereto, shall be valid unless consented to in
writing by Assignors and Assignee.
8. Continuing Obligations of Assignors. Nothing contained herein shall be
construed to bind or obligate Assignee to undertake any direct efforts, incur
any costs or take responsibility for enforcement of the Claim or pursuit of the
litigation. Assignors agree to remain responsible for and shall take any and
all steps necessary to pursue the Claim to its conclusion.
9. Applicable Law. This assignment shall be governed by the laws of
Michigan. If any provision of this assignment shall be unenforceable, this
assignment shall be enforceable as if such provision was not contained
herein. This assignment shall inure to the benefit of and shall be binding
upon the respected successors and assigns of the parties hereto.
10. WAIVER OF JURY TRIAL AND BOND; SUBMISSION TO JURISDICTION; AND
ACKNOWLEDGEMENT.
A. ANY JUDICIAL PROCEEDINGS ARISING FROM OR RELATING TO THIS
ASSIGNMENT, THE FORBEARANCE AGREEMENT OR ANY OTHER FUTURE AGREEMENT BETWEEN ANY
ONE OR MORE OF THE ASSIGNORS AND ASSIGNEE MAY BE BROUGHT BY ASSIGNEE IN A COURT
OF COMPETENT JURISDICTION OF THE STATE OF MICHIGAN OR THE UNITED STATES OF
AMERICA, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH ASSIGNOR AND
ASSIGNEE ACCEPT FOR THEMSELVES AND IN CONNECTION WITH THEIR RESPECTIVE
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION, OF
THE AFORESAID COURTS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY FINAL JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS ASSIGNMENT, THE FORBEARANCE AGREEMENT
OR ANY OTHER PRESENT OR FUTURE AGREEMENT BETWEEN ANY ONE OR MORE OF THE
ASSIGNORS AND ASSIGNEE. EACH ASSIGNOR WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON THEM, AND
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CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY MAIL OR MESSENGER
DIRECTED TO THEM AT THEIR ADDRESS SET FORTH IN THIS ASSIGNMENT. EACH OF THE
ASSIGNORS WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND OR SURETY WHICH
MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF ASSIGNEE. NOTHING CONTAINED IN THIS
SECTION AFFECTS ASSIGNEE'S RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECTS ASSIGNEE'S RIGHT TO BRING ANY ACTION OR PROCEEDING
AGAINST ANY ONE OR MORE OF THE ASSIGNORS IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY ASSIGNOR AGAINST ASSIGNEE
INVOLVING, DIRECTLY OR INDIRECTLY, ANY CLAIM OR MATTER IN ANY WAY ARISING OUT
OF, RELATED TO OR CONNECTED WITH THIS AGREEMENT OR ANY PRESENT OR FUTURE
AGREEMENT BETWEEN ANY ONE OR MORE OF THE ASSIGNORS AND ASSIGNEE, MUST BE
BROUGHT ONLY IN A COURT LOCATED IN THE STATE OF MICHIGAN. EACH ASSIGNOR WAIVES
ANY OBJECTION TO JURISDICTION OR VENUE OF ANY ACTION INSTITUTED HEREUNDER OR IN
CONNECTION HEREWITH AND MAY NOT ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE OR BASED UPON FORUM NONCONVENIENS.
B. EACH ASSIGNOR ACKNOWLEDGES THAT (1) IT HAS FULLY READ ALL OF
THE AGREEMENT AND HAS BEEN GIVEN THE OPPORTUNITY TO CONSULT WITH COUNSEL AND
OTHER ADVISORS OF THEIR CHOICE, AND AFTER CONSULTING WITH SUCH COUNSEL OR
ADVISORS, KNOWINGLY, VOLUNTARILY AND WITHOUT DURESS, UNLAWFUL RESTRAINT,
INTIMIDATION OR COMPULSION, ENTERS INTO THIS AGREEMENT, BASED UPON SUCH ADVICE
AND COUNSEL AND IN THE EXERCISE OF ITS BUSINESS JUDGMENT, (2) THIS AGREEMENT HAS
BEEN ENTERED INTO IN EXCHANGE FOR GOOD AND VALUABLE CONSIDERATION,
RECEIPT OF WHICH THE PARTIES HERETO ACKNOWLEDGE, AND (3) THEY HAVE CAREFULLY
AND COMPLETELY READ ALL THE TERMS AND PROVISIONS OF THIS AGREEMENT AND ARE NOT
RELYING ON THE OPINIONS OR ADVICE OF ASSIGNEE OR ITS AGENTS OR REPRESENTATIVES
IN ENTERING INTO THIS AGREEMENT.
C. THE ASSIGNORS HERETO ACKNOWLEDGE THAT THEIR RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL RIGHT, BUT THAT THIS RIGHT MAY BE WAIVED. EACH
ASSIGNOR AND ASSIGNEE HEREBY KNOWINGLY, VOLUNTARILY AND WITHOUT COERCION, WAIVE
ALL RIGHTS TO A TRIAL BY JURY OF ALL DISPUTES ARISING OUT OF OR IN RELATION TO
THIS AGREEMENT, THE FORBEARANCE AGREEMENT OR ANY OTHER AGREEMENTS BETWEEN ANY
OF THE ASSIGNORS AND ASSIGNEE. NO PARTY TO THIS AGREEMENT WILL BE DEEMED TO
HAVE RELINQUISHED THE BENEFIT OF THIS WAIVER OF JURY TRIAL UNLESS SUCH
RELIQUISHMENT IS IN A WRITTEN INSTRUMENT SIGNED BY THE PARTY TO WHICH SUCH
RELINQUISHMENT WILL BE CHARGED. EACH ASSIGNOR AND ASSIGNEE
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AGREE THAT ANY OF THEM MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THEIR CONSENT TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY AND THE OTHER AGREEMENTS SET FORTH IN THIS
AGREEMENT.
IN WITNESS WHEREOF, ASSIGNORS HAVE CAUSED THIS ASSIGNMENT TO BE DULY EXECUTED
ON THE DAY AND YEAR FIRST ABOVE WRITTEN.
WITNESS RIVIERA HOLDING COMPANY
[SIG] BY: Xxxxxxx X. Xxxxx
---------------------- -----------------------
Name: Xxxxxxx X. Xxxxx
[SIG] -----------------
---------------------- Title: President
------------
WITNESS RIVIERA TOOL COMPANY,
SUCCESSOR BY MERGER TO THE
INTERESTS OF RIVIERA DIE AND
TOOL, INC.
Xxxxxxx X. Xxxxx
---------------------- By: [SIG]
[SIG] -----------------------
---------------------- Name: Xxxxx X. Xxxxxx
------------------
Title: CFO
------------
WITNESS
[SIG] Xxxxxxx X. Xxxxx
---------------------- -------------------------
[SIG] Xxxxxxx X. Xxxxx
----------------------
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WITNESS
Xxxxxxx X. Xxxxx Xxxxxx Xxxxx Xxxxxx
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XXXXXX XXXXX XXXXXX
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