EXHIBIT 10.24
FRAMEWORK AGREEMENT
ON THE ONGOING PURCHASE OF
RECEIVABLES
between
▇▇▇▇▇ LEMMERZ WERKE GMBH
Ladestra(Beta)e
53639 Konigswinter
- hereinafter referred to as the "Connection Client" -
and
MHB FINANCIAL SERVICES GMBH & CO. KG
Hauptstra(Beta)e 332
65760 Eschborn
- hereinafter referred to as "MHB FS" -.
SECTION 1 PURCHASE OF RECEIVABLES
1. During the term of this contact the Connection Client offers MHB FS for
purchase - under consideration of paragraphs 4, 5 and 6 - currently
existing or newly arising receivables originating from selling goods and/or
providing services against customers. The receivables earmarked for sale
are identified in the receivables inventory lists to be transmitted monthly
by the Connection Client to MHB FS. MHB FS categorizes each customer and
communicates this to the Connection Client. The maximum purchase volume per
customer or customer group shall be based on such categorization.
2. Current receivables are those existing on the date prior to the first
purchase by MHB FS (including value added tax).
3. MHB FS buys from the Connection Client the receivables or parts of those
identified in the receivables inventory lists, determined by MHB FS in
continuous purchase lists and communicated to the Connection Client. Each
one of the receivable purchases is agreed upon in separate receivables
purchase agreements on the basis of this Framework Agreement.
4. Receivables, for which the Connection Client has agreed with his customer
on a term of payment of more than 120 days from the invoice date (under
consideration of paragraph 5) and receivables, with which the limit
established by MHB FS is exceeded and receivables, whose ability to be
assigned is excluded by agreement with the debtor or depends on his consent
or for which exists a prohibition of assignation, on which Section 354a of
the Commercial Code is not applicable, are not bought by MHB FS as well as
receivables against debtors who did not fulfill their payment obligations
in the past. The limit established for each client can be modified by MHB
FS during the validity of this agreement.
5. Upon the Connection Client's justified request a prorogation of the payment
goal up to maximum 30 days can be granted in individual cases.
6. If there are reasons, in the opinion of MHB FS, that question the
enforceability of the Connection Client's receivables bought against a
customer, or if the volume of purchased receivables against a customer,
which MHB FS considers acceptable regarding creditworthiness, has been
reached, then MHB FS can exclude any further purchases of receivables
against this customer for the future.
7. The Connection Client will assist MHB FS in obtaining documents required
for judging the creditworthiness of the customers.
SECTION 2 PROOF OF RECEIVABLES
1. Furthermore, the Connection Client will prove to MHB FS at the time of
purchase and beyond once a month - first on 12.10.2005, afterwards on the
30th of the following
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months (= invoice period) - the total inventory of the receivables against
customers according to the customer list, by means of receivables inventory
lists.
2. The receivables inventory lists will be made available by the Connection
Client in electronic data processing format. The Connection Client will
provide the receivables inventory lists with the following data: customer's
corporate designation, date of invoice, invoice number, amount (gross) of
invoice, due date.
3. Furthermore, the Connection Client will furnish proof for each cutoff date
indicated by MHB FS, as long as this is required for determination of their
inventory of receivables.
4. The Connection Client will provide a copy of the invoice for all
receivables sold and hold them for MHB FS as trustee. MHB FS has the right
to request the delivery of the copies of the invoices at any time.
SECTION 3 PURCHASE PRICE
1. MHB FS owes the Connection Client at the time of each purchase of a
receivable a purchase price in the amount of the payment claim indicated in
each invoice; the Connection Client owes MHB FS a discount on the purchase
price, the amount and maturity of which will be agreed upon separately by
the parties. The fees for services for MHB FS will be invoiced, if required
by tax regulations, plus value added tax. This may also apply to the
discount on the purchase price in some cases.
2. The discount is payable monthly in advance.
3. The proceeds from the collections received by the Connection Client are
treated as payments by MHB FS of the purchase price debt towed by MHB FS,
according to paragraph 1 for new receivables and are continually accounted
accordingly.
4. If, due to the Connection Client's only monthly billing a prompt payment of
the purchase price by MHB FS is not possible, the Connection Client has no
claim for delay.
5. The purchase price must be used as a priority for paying the Connection
Client's turnover tax obligations and claims of preliminary suppliers.
SECTION 4 SETTLEMENT OF TRANSACTIONS
1. The Connection Client hereby assigns to MHB FS all his present and future
receivables against customers, who are listed in receivables inventory
lists according to Section 1 paragraph 1 of this agreement or will be
listed, under the condition, that a purchase of these receivables is
effected by conclusion of receivables purchase agreements or changed
agreements by MHB FS. Receivables cancelled by
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payments will be immediately replaced by other, not yet assigned
receivables of the Connection Client against one or more customers defined
in the customer list. The substitution will be documented in the next
following assignation list. MHB FS accepts the assignation.
2. If an account receivable is only purchased partially, then, the part bought
by MHB FS has priority over the part not purchased.
3. If a prohibition of cession is in force for an account receivable, this
passes over to MHB FS, in case of lifting of the prohibition which may be
caused by either party.
4. Receivables for which the assignment to MHB FS is not yet effective due to
advance assignment of the Connection Client to his supplier shall pass over
to MHB FS at the time of satisfaction of suppliers or his waiving the
security.
5. The Connection Client hereby surrenders his turnover tax compensation
claims relating to the purchased receivables. The assignment of turnover
tax compensation claims will be effective when generating the claim for
uncollectibility of the purchased receivables. The Connection Client
obliges himself to execute the assignment of turnover tax compensation
claims upon first request of MHB FS in a formal manner recognized by MHB
FS.
6. Furthermore, MHB FS has the right to charge amounts from collected turnover
tax compensation claims from receivables sold to MHB FS, against the
amounts owed by MHB FS from this agreement or the receivables purchase
agreements.
7. If there is an authentic or inauthentic checking account relationship
between the Connection Client and the customers or if one is established
later, then the Connection Client additionally transfers to MHB FS the
receivables from balances drawn or to be drawn in the future, the right to
determine present balances as well as the right to rescind the checking
account relationship.
8. The Connection Client is obliged to rescind an existing checking account
relationship upon request of MHB FS.
SECTION 5 DEL CREDERE
1. MHB FS carries the risk of insolvency of the customers under consideration
of paragraph 2.
2. The Connection Client is liable for the cancellation of receivables bought
by MHB FS, caused by the insolvency of one or more customers, but up to a
maximum of 5% of the total of the receivables bought by MHB FS in the del
credere case, in the amount of their value indicated in the invoices
against the customers, minus the result from granted securities (see
Section 6 paragraph 3), especially the contracted credit insurance. Basis
for dimensioning the amount of each one of the liabilities is the total
volume of
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receivables of the last purchase list prior to the time of the del credere
case, according to Section 1 paragraph 3 of this agreement.
3. Inability to pay is present at insolvency, compulsory enforcement or real
provable inability to pay of one or more customers and resulting
uncollectibility of the receivables.
4. An inability to pay is not assumed if the customer substantiates his
obligation to pay until the specified deadline and conclusively defrays and
denies payment partially or totally because of this reason.
SECTION 6 SECURITIES
1. The Connection Client hereby transfers to MHB FS all secondary rights to
the purchased receivables and securities liable for these, such as, e. g.
claims from guarantees, letters of credit, assumption of debt etc., as well
as his claims from a credit insurance contracted for receivables bought by
him, if any. These securities and rights pass on to MHB FS in each case at
the time when the purchase of the receivables becomes effective, at the
latest, when the Connection Client acquires them.
2. If special or additional statements and actions are required for the
transfer of the securities and rights named under paragraph 1, the
Connection Client obliges himself to deliver them or act upon them upon the
request of MHB FS.
3. The Connection Client obliges himself towards MHB FS at their first
request, to secure his del credere obligation by ordering these acceptable
securities, according to Section 5 paragraph 2. MHB FS can request this if
the Connection Client does not comply with his obligations on the basis of
the agreements entered into by this contract or if reasons are noticeable
that cast doubts on the fulfillment of this obligation for economic or
other reasons.
4. The securities and rights transferred to MHB FS serve to secure all their
receivables bought from the Connection Client.
SECTION 7 TRUTH GUARANTEE
1. The Connection Client guarantees MHB FS that:
1.1. the receivables bought by MHB FS exist at present and in the future,
that their transfer is not excluded or linked to the consent of the
customers, and that the transfer is effective and especially that any
legal or other regulations, also formal regulations, are fulfilled for
the legally effective transfer of the receivables.
1.2. the receivables bought by MHB FS are legally enforceable, also against
foreign debtors and in relation to any transfer risks.
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1.3. no deductions are executed by the customers (e. g. discounts,
reductions, bonuses, postage expenses).
1.4. that the services upon which the receivables are based and other
obligations connected therewith against customers or clients were
rendered according to the contract, that the customers do not
justifiably request diminution, rectification of defects or indemnity
nor declare rescission or make valid a right of retention.
1.5. the receivables bought by MHB FS are not linked to other objections or
exceptions, e. g. the exception of fulfillment by offset.
1.6. the receivables bought by MHB FS are not charged with rights of third
parties.
2. If the customer is not totally or partially obliged to payment, MHB FS can,
with immediate effects, request the restoration of absence of defects
(rectification of defects), request reduction of the purchase price of the
account receivable, declare rescission from the purchase of the receivable
and additionally claim indemnity.
3. If the Connection Client doubts the relevancy of the objections or
exceptions by the customer against the Connection Client according to
paragraph 1, numerals 1.3 and 1.4, his obligation of paragraph 2 only
expires if he has proven to MHB FS the customer's obligation to pay.
4. The Connection Client's liability for the legal existence of the guaranteed
rights is independent of indebtedness (encumbrance), especially if MHB FS
knew or should have known about possible legal deficiencies at the time of
purchase
SECTION 8 OBLIGATION OF INFORMATION AND COMMUNICATION
1. The Connection Client shall inform MHB FS:
1.1. of possible reasons of purchase exclusion (Section 1 paragraphs 4 and
5), and special verbal or written agreements concerning MHB FS'S
interest as to the receivables sold.
1.2. of negative information that reaches him about a customer's
creditworthiness, especially in case of canceling or lowering an
existing credit insurance limit as well as of any objections or
exceptions of a customer against his obligation to pay or if the
customer impugns his obligation to pay for other reasons. The
Connection Client shall voice his opinion at the same time about the
objections presented. The Connection Client shall immediately attend
to any notification of defects.
1.3. if the customer has counterclaims against the Connection Client or
claims to have them.
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1.4. if MHB FS's rights to the receivables purchased or to transferred
rights or securities are compromised or endangered by actions of third
parties or other events, such as deterioration of assets or suspension
of payments.
2. As soon as third parties execute the receivables purchased, the Connection
Client will immediately send MHB FS a copy of the forfeiture order as well
as all other documents necessary for an intervention against the levy of
execution. He shall inform the execution creditor immediately in writing of
MHB FS'S rights.
3. The Connection Client obliges himself to pass information, proofs and
documents to MHB FS upon request, which MHB FS deems necessary for
asserting the receivables purchased and rights and securities transferred,
and support MHB FS to the extend possible against claims of third parties.
SECTION 9 OBLIGATION OF DISCLOSURE
1. MHB FS will treat the assignment of receivables confidentially. They have
the right to obtain balance confirmations at random directly from the
Connection Client after notification, and to disclose the transfer of the
receivables in question in this context. MHB FS has the right at own
discretion, to request at any time the disclosure of receivables transfers
from the Connection Client or to communicate the disclosure to the
customers. The Connection Client bears the costs of the disclosure.
2. Notwithstanding the ruling from paragraph 1, the Connection Client shall
disclose the transfer of a receivable upon MHB FS's first request, if the
customer has not paid within 10 days after the due date without raising
objections or exceptions.
3. The Connection Client shall also proceed to the disclosure when he learns
of facts that allow conclusions about the customer's inability to pay (e.
g. note protest, insolvency reports).
4. The Connection Client shall notify the customer of the transfer upon MHB
FS's first request within 10 days after the deadline named in paragraph 2
or after his knowledge of the circumstances named in paragraph 3 and
substantiate the notification of transfer to MHB FS.
5. The Connection Client shall deliver to MHB FS upon request in each case a
number of transfer forms signed in blank corresponding to the number of
customers.
SECTION 10 RIGHT TO REPURCHASE, REVERSE ASSIGNMENT
1. Upon the Connection Client's request, MHB FS is obliged to offer him
acquired receivables for repurchase. Nevertheless, only the repurchase of
all receivables against one customer can be requested.
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2. The Connection Client owes MHB FS a purchase price for the repurchased
receivables by him in the amount of each account receivable against the
customers minus a discount that is computed for a period between the date
of the repurchase and the next previewed cutoff date or the due date of the
receivable, whichever comes first; the discount is decisive in the amount
at which it was computed on the last cutoff date.
3. The purchase price is due when executing the repurchase.
4. MHB FS will transfer the repurchased receivables and securities transferred
to them according to Section 6 back to the Connection Client versus payment
of the purchase price.
SECTION 11 ADMINISTRATION OF RECEIVABLES
1. The Connection Client is authorized until revocation by MHB FS and obliged
to them, to keep the total debtor books of the receivables listed in the
inventory lists of receivables (purchased or not) and to carry out the
collection procedure. This obligation includes:
1.1. the monthly listing of all accounting movements,
1.2. ▇▇▇▇▇▇▇ and legal enforcement of receivables, also in del credere
cases,
1.3. the customary supervision of debtors (e.g. control of available
conditions and payment schedules).
2. MHB FS has the right to disclose the receivable data to a trustworthy
professional with the goal of risk review of portfolios.
3. MHB FS reserves the right to own legal prosecution. In any case, the
expenses for legal prosecution are charged to the Connection Client. The
Connection Client will support MHB FS to his best knowledge and free of
charge in the recovery of claims.
4. MHB FS duns and collects the receivables, if necessary. If, upon the
Connection Client's request, MHB FS desists from collecting a receivable,
MHB FS can request exemption from liability according to Section 5
paragraph 1 of the contract.
5. The Connection Client is obliged to orderly fulfill his tax obligations,
especially payment of turnover tax amounts withheld by him from the
collected receivables. MHB FS has the right to substantiate this obligation
by adequate measures, in a given case, also through inquiry at the tax
administration. The claim to this substantiation is justified by the
obligations of Section 13c of the Value Added Tax Act.
6. The Connection Client will keep the documents required by commercial and
tax laws for MHB FS in accordance with the legal rulings.
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7. The Connection Client will transfer to MHB FS income not accountable
according to Section 3 paragraph 3 that reach him or a third party on his
behalf.
8. To the extent, due to the Connection Client's monthly invoicing, immediate
payment of revenue from collections not accounted is not possible, then MHB
FS has no claims for delay.
9. If MHB FS declares revocation according to paragraph 1, the following
applies to beginning at the time of arrival of the declaration of
revocation with the Connection Client:
9.1. In case of payments by check the ownership of these papers passes on
to MHB FS, as soon as the Connection Client acquires them;
9.2. If payments are carried out by bills of exchange, the Connection
Client assigns the rights thereof in advance to MHB FS;
9.3. The delivery of check and ▇▇▇▇ of exchange is substituted by the
Connection Client's keeping them for the time being for MHB FS free of
charge, or, if he is not in their immediate possession, he assigns the
claim for delivery against third parties to MHB FS in advance. He will
endorse the documents and deliver them immediately to MHB FS.
9.4. The Connection Client delivers to MHB FS the electronic data
processing media on which names, addresses and receivables against
customers are saved, in advance in the case of revocation. The
transfer of these media is substituted by the Connection Client's
keeping them for the time being for MHB FS free of charge, or, if he
is not in their immediate possession, he assigns the claim for
delivery against third parties to MHB FS in advance. Section 6
paragraph 4 is valid accordingly.
9.5. Collection revenue that reaches the Connection Client after declared
revocation must be transferred immediately, with all proofs of
payment, to MHB FS. With the arrival of the declaration of revocation
at the Connection Client, Section 3 paragraph 3 is no longer valid.
SECTION 12 BALANCE SHEET, BOOKKEEPING
1. The Connection Client shall provide to MHB FS all requested information
about his economic situation and make available all documents necessary to
clearly and timely assess the economic situation. During the term of this
agreement the Connection Client shall submit to MHB on a regular basis the
relevant documents signed and dated. These documents in particular include
the audited or approved financial statement including supplement and
situation report as well as the consolidated financial statement each with
business report and audit report. Should the submission of the documents
not be possible within nine month after the end of the business year, the
Connection Client will provide preliminary drafts of them (e.g.
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preliminary or interim financial statement). MHB FS shall have the right to
forward the documents to the financing bank.
2. In case the Connection Client does not perform his obligation to disclose
his economic situation MHB FS shall have the right to extraordinarily
terminate this agreement. MHB FS will duly take into consideration the
Connection Client's interests.
3. The Connection Client undertakes to inform MHB FS during the term of this
agreement and without undue delay about all relevant circumstances in
connection with the financing of the ▇▇▇▇▇ Lemmerz group and the parent
company ▇▇▇▇▇ Lemmerz International Inc, to the extent, however, that the
aggregate amount of the respective credit debt or other financial debt
exceeds the amount of EUR 5,000,000.00 or the equal amount in a different
currency. A relevant circumstance shall be assumed in particular if credit
debts or other financial debts are not paid when due, or if the maturity of
such debts has been or may be upon request accelerated any time (reason for
termination or event of default).
4. MHB FS and/or the financing bank have the right to inspect the Connection
Client's books and other documents for the purpose of examining the
receivables purchased and rights and securities transferred to them by the
Connection Client, or to have them examined by an accountant sworn to
secrecy and to be informed about the results of such inspection. The
Connection Client will present at least once a year a confirmation from his
auditor (certified public accountant) within the framework of year-end
audit, as a random check adequate to the volume of receivables, of the
existence of receivables sold, in truth and fairness of the debtors'
administration, the legal effectiveness of the cession, payment routings
and guarantees.
SECTION 13 DURATION OF CONTRACT, RIGHT TO RESCISSION
1. This contract is valid for the time being. It can be rescinded by both
parties with a three months notice to the end of the month.
2. Each party of the contract has the right to rescind this contract without
notice for important reasons, especially if the other party culpably
violates an essential obligation of this contract despite reminders in
writing.
3. MHB FS has the right to rescind this contract without notice, especially
if:
3.1. the Connection Client stops his payments;
3.2. the Connection Client's financial circumstances worsen significantly
or a considerable danger to his assets arises;
3.3. an insolvency proceeding has been filed about the Connection Client's
assets or a proceeding for an affidavit according to Section 807 of
the Civil Procedural
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Code has been initiated or if bills of exchange have been protested
due to lack of payment;
3.4. the legal or supervisory bases change in such a way that the execution
of purchase of receivables has no economic or legal grounds.
4. A purchase of receivables executed at the date of rescission will be
transacted according to the agreements of his contract and the receivable
purchase contract, unless a different ruling is agreed upon by the parties.
5. MHB FS has the right to totally or temporarily stop the purchase even
without canceling the contract. For transactions of receivables already
sold, paragraph 4 is applicable analogically.
SECTION 14 TRANSFER OF RIGHTS AND OBLIGATIONS
1. With the Connection Client's consent, MHB FS has the right to transfer the
obligations and rights of this contract to another corporation. The
Connection Client's claims from this contract are not assignable.
2. MHB FS has the right to assign the receivables assigned to them as well as
all other rights and claims of this agreement and/or receivables purchase
contracts or modification clauses, to third parties, in the framework of
refinancing.
SECTION 15 PARTIAL NULLITY
1. Should one clause or parts thereof from this contract be or become
ineffective, the validity of the remaining clauses shall be untouched.
2. The parties entering into this contract are obliged to substitute the
ineffectual clause by one that is economically closest to it.
SECTION 16 COSTS
Expenses in connection with each one of the receivables, their sale and use and
legal expenses and those out of court, turnover tax, etc. (however, not
corporate tax, trade tax or other personal taxes) and other expenses are borne
by the Connection Client, not including the costs for executing this contract
and the receivables purchase contract to be entered into within its framework.
SECTION 17 WRITTEN FORM
Amendments or addenda to this contract can be made only in writing.
SECTION 18 JURISDICTION
The jurisdiction for all disputes resulting from this contract is the seat of
MHB FS.
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Konigswinter, ... Eschborn, ...
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ /s/ ▇▇. ▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇
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(▇▇▇▇▇ Lemmerz Werke GmbH) (MHB Financial Services GmbH & Co. KG)
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