General Terms and Conditions of Sale, Delivery and Payment of August Strothlücke GmbH & Co. KG

As at October 2009

§ 1 Scope of application

1. All deliveries and services – including future business transactions – are exclusively subject to the following terms and conditions of sale, delivery and payment.

2. Our terms and conditions shall apply exclusively; conflicting terms and conditions or conditions which deviate from our terms and conditions are subject to our express written approval. These conditions shall also apply even if we carry out delivery to the buyer without reservation in the knowledge of the buyer’s conflicting conditions of business or of conditions of the buyer which deviate from our terms and conditions.

3. If any different conditions have previously applied, the present terms and conditions shall supersede them with effect from the first shipment following the publication of these trading conditions.

4. Our terms and conditions shall only apply to companies as defined in Sec. 310 (1) of the German Civil Code [Bürgerliches Gesetzbuch, BGB].

§ 2 Offer – Minimum order quantities

1. Our offer is subject to change.

2. Upon ordering goods, the buyer commits himself to purchasing the goods with binding force. The minimum order quantity shall be 100 kg. We reserve the right to accept a contractual offer within 2 weeks following its receipt by our company. Acceptance can either be effected in writing or on delivery of the goods to the buyer.

§ 3 Terms of delivery

1. The end product weight as ascertained in our factory shall be decisive and controlled. Normal weight loss occurred during transportation shall be at the loss of the buyer. Excessive weight differences must be communicated immediately by telephone or telex upon receipt of goods and must be noted and acknowledged on the consignment note or delivery receipt.

2. The company reserves the right to make technical and constructive commercial changes to the delivery items to the extent that the buyer is not unreasonably affected and the serviceability of the goods remains unaffected.

3. In consideration of our interests, partial deliveries shall be permitted to an extent which the buyer can be expected to tolerate.

4. We shall also be entitled to carry out short and excess deliveries to the extent that, in consideration of our interests, the buyer is not unreasonably affected. This particularly applies to customary quality and quantity tolerances.

5. We reserve the right to abandon subsequent deliveries of small quantities if they are not available for dispatch on delivery days and failing an express confirmation.

§ 4 Prices – Terms of payment

1. Unless specified otherwise in our offer and/or the order confirmation, our prices are quoted ex works. We reserve the right to reasonably change our prices if after concluding the contract there occurs a reduction or increase in costs, particularly with regard to the conclusion of collective agreements or changes to material prices or transport costs whereas evidence shall be procured to the buyer on request. In the event that no prices have been agreed by the time of contract conclusion, our prices as are valid on the date of delivery shall apply. For agreed partial deliveries, every delivery can be charged separately.

2. Statutory value-added tax is not included in our prices; such tax will be shown separately at the statutory rate prevailing on the day of invoice issue.

3. Unless agreed otherwise, the net purchase price (without deductions) shall be payable within 21 days of the date of invoice. The date of payment shall be the day the payment is received on our account. If payment is delayed, we reserve the right to add interest for default at eight percent above the respective base interest rate. Proof of a further interest loss can be furnished by us at any time and invoiced. We also reserve the right to claim from the buyer EUR 6 for the second reminder, EUR 12 for the third and EUR 18 for the fourth reminder.

4. Any non-compliance with our payment conditions, default, or circumstances which are capable of decreasing the buyer’s credit standing, lead to immediate debt claim for all of our payments, including those deferred. The buyer, his authorized representative and/or his managing director shall be obliged to inform us immediately of any impending enforcement measures against the buyer. Should this information be withheld deliberately, we shall hold the aforementioned persons personally responsible for the damages resulting thereof.

5. Payment made by bills of exchange is only allowed if the furnishing of a bill of exchange was agreed in advance. Checks and bills are only accepted on account of payment. Credit for such checks and bills of exchange shall be applied as per the date on which we can dispose of the equivalent thereof. Bills shall be credited in consideration of charges of transmitted discounts, stamp duty and bank fees and, as the case may be, collection costs.

6. Any further contractual or legal requirements arising in case of default shall remain reserved.

7. The buyer shall only be entitled to rights of setoff if his counterclaimshave been legally established, are uncontested or have been acknowledged by us.

8. The buyer shall be entitled to exercise a right of retention insofar as his counterclaim is based on the same contractual relationship.

9. Buyer’s claims resulting from the contractual relationship may not be assigned to third parties without our consent.

10 The deduction of a collection/del credere commission is only permissible after the previous conclusion of a written collection/del credere agreement between us and the buyer.

11. On payment by a third party, particularly within the scope of settlement and/or del credere agreements, the debt in respect of purchase price obligation shall only be deemed discharged upon receipt of payment by us.

12. Payments made to our representatives or employees only take effect if they present an authority to collect upon receipt of such payment.

§ 5 Delivery time

1. Adherence to our delivery commitments shall be contingent upon the prompt and proper fulfillment of the buyer’s duties. We reserve the right to plea non-fulfillment of the contract.

2. If the buyer is in default of accepting the ordered goods or if he culpably infringes any other duty to cooperate, we shall be entitled to demand payment of any associated damages, including any additional expenditure, as compensation. The right to assert any further claims shall remain reserved.

3. Insofar as the conditions as specified in para. 2 arise, the risk of accidental loss or deterioration of the object purchased shall pass to the buyer at the time at which he has entered into default of acceptance or debtor’s default.

4. If we default in delivery, the damage caused by default shall be limited to a rate of 0.5% of the net value of the goods to be delivered per day of delay, but to a maximum aggregate rate of 5% of the gross value of the goods to be delivered. Any further damage claims shall be excluded.

5. However, we shall be liable in accordance with applicable statutory provisions
- insofar as the underlying business contract is a sale at a fixed point in time.
- if, as a consequence of any delay in delivery for which we are responsible, the buyer is entitled to assert the right that his interest in the continued fulfilment of the contract has ended.
- if the delay in delivery for which we are responsible is the result of a culpable violation of an essential contractual obligation. “Essential contractual obligations” refers to obligations which serve to protect legal positions of the buyer which are essential to the contract and which are just to be granted to him in terms of the content and purpose of the contract; moreover, contractual obligations shall be deemed to be essential, the fulfilment of which only enables a proper contract performance and on the compliance of which the buyer relies and may rely upon.
- in the case of injury to life, limb or health which arises as a result of an intentional breach of duty from our part or an intentional or negligent breach of duty from the part of any of our legal representatives or vicarous agents.
- if the delay in delivery is the result of an intentional or grossly negligent breach of contract for which we are responsible; culpability on the part of our representatives or vicarious agents shall be attributed to us.
- in the event of any other prerequisites for liability prescribed by law.

In the event that the delay in delivery is not caused by a breach of contract from our part, our compensation liability shall be limited to foreseeable, typically incurred damages.

6. Upon the occurrence of any unforeseen obstacles which are beyond our control and which we could not avert despite taking reasonable care given the circumstances – irrespective of whether they occur to us or to any subcontractor – such as force majeure (for example, war or natural disasters), delays in delivery pertaining to fundamental raw materials, etc. – we reserve the right to withdraw from the supply contract in whole or in part or to extend the delivery period by the duration of the obstacle. We reserve the same rights in the case of strikes or lockouts in our company or in the company of the upstream supplier. We shall inform our customers of such circumstances without delay.

§ 6 Passing of the risk

Unless otherwise agreed, delivery shall be agreed ‘ex factory’.

§ 7 Liability for defects

1. Warranty claims of the buyer require that he has observed his statutory obligations to examine the goods and to give notice of defects in accordance with Sec. 377 of the German Commercial Code. On notifying a defect, he must give us the opportunity to examine the justification of this notice of defects, to make the rejected goods available to us and to return them to us at our request and his risk. In the event of an impossibility of returning the goods to us, a separate agreement is to be reached. Upon commencement of their processing, handling, compounding, or mixing with other goods, the goods delivered shall be deemed to be approved by the buyer in accordance with the contract. The same shall apply in case of a reshipment from the original place of destination.

2. Defects in parts of the delivery shipment shall not entitle buyers to make complaints about the delivery as a whole, unless it would be unreasonable for the buyer to accept the defect free part of the shipment.

3. In the case of defects in the purchased goods, we reserve the right – except in cases of recovery from the supplier as provided under Sec. 478, 479 of the German Civil Code – to repair the defect or to send a defect free replacement (supplementary performance). In the case of replacement, we shall bear the required costs for this purpose to the extent that they do not increase by sending the goods to another place of delivery. Any rights of recourse on the buyer which might arise against us in case of a resale of the goods only exist insofar as the buyer has not made any arrangements with his customers which exceed the statutory claims based on defects.

4. If the subsequent performance fails, the buyer shall be entitled, at his option, to withdraw from the contract or demand reduction in price.

5. We shall be liable in accordance with applicable statutory provisions to the extent the buyer asserts his claims for damages which are based upon a deliberate act or gross negligence, including any deliberate act or gross negligence of our representatives or vicarious agents. Insofar as we are not blamed for any intentional breach of contract, compensation for damages shall be limited to foreseeable, typically occurring damages.

6. To the extent the buyer is entitled to demand compensation in lieu of performance, our liability shall be limited to costs for foreseeable, typically occurred damages, also within the scope of para. (4) above.

7. We shall be liable in accordance with applicable statutory provisions insofar as we act in culpable breach of any essential contractual obligation; in this case, however, compensation for damages shall be limited to foreseeable, typically occurring damages. “Essential contractual obligations” refers to obligations which serve to protect legal positions of the buyer which are essential to the contract and which are just to be granted to him in terms of the content and purpose of the contract; moreover, contractual obligations shall be deemed to be essential the fulfilment of which only enables a proper contract performance and on the compliance of which the buyer relies and may rely.

8. Also in case of liability regardless of fault, in particular in the event of initial impossibility or defects in title, we shall only be liable for any typical and foreseeable damage.

9. We shall be liable in accordance with applicable statutory provisions insofar as we have given a guarantee for the condition of our goods or the contract performance or a procurement risk. Liability shall be limited to the payment of foreseeable, typically occurring damage.

10. We shall be liable in accordance with applicable statutory provisions if, in case of a breach of other duties within the meaning of Sec. 241 (2) of the German Civil Code, the buyer cannot be reasonably expected to adhere to our performance any longer. Liability shall be limited to the payment of foreseaable, typically occurring damages.

11. Liability arising from culpable injury to life, limb or health shall remain unaffected; the same shall apply to strict liability under the German Product Liability Act [Produkhaftungsgesetz].

12. Unless otherwise provided hereinabove, liability shall be excluded.

13. The limitation period for any claims based on defects shall be one year as of delivery of the goods. The cases as set forth in § 7 (5) (intent and gross negligence) an in § 7 (11) shall be subject to the statutory limitation period.

14. We shall be liable for the shelf life of self-service packed goods until the printed expiration date.

§ 8 Joint and several liability

1. Any further liability for damages as provided in § 7 above shall be excluded irrespective of the legal nature of the asserted claims. This applies in particular to claims for damages on the basis of culpa in contrahendo, other breaches of duty, or tortious claims to compensation for property damage pursuant to Sec. 823 of the German Civil Code.

2. Insofar as liability for damages on our part is excluded or limited, then such exclusion or limitation shall also apply with regard to the personal liability for damages of our employees, workers, representatives, and vicarious agents.

§ 9 Retention of title

1. We retain title to the delivered goods until all claims including those that arise in the future within the scope of the business relationship as well as all ancillary claims, have been paid in full. If the buyer shall be in breach of contract, in particular in payment default, we shall be entitled, after having set a reasonable time limit, to repossess the object of purchase. A repossession of the object of purchase shall only be regarded as a withdrawal from contract if this is expressly declared by us in writing or required by mandatory provisions of law. Subsequent to the repossession of the object of purchase, we shall be authorized to sell it, and the sales proceeds shall be set off against the liabilities of the buyer less appropriate realization costs.

2. The meat and sausage products are to be stored in an appropriate and product-related manner.

3. The buyer may neither pledge the goods and any accounts receivable created in their stead nor assign them to third parties and/or assign them to third parties by way of security.

4. The buyer shall inform us forthwith in writing of any seizure or other third-party intervention, so that we can take legal action in accordance with Sec. 771 of the German Code of Civil Procedure [Zivilprozessordnung, ZPO]. Insofar as the third party is not in a position to reimburse us for court and out of court costs of legal action in accordance with to Sec. 771 of the German Code of Civil Procedure, the buyer shall be liable for any loss incurred by us.

5. The buyer shall have the right to resell, process or mix the object of purchase within the ordinary course of business. However, he assigns to us all claims in the amount of the final invoice amount (incl. value-added tax) of our claim, which arise to him against his customers or any third parties from their resale and regardless of whether the object of purchase was resold without or after processing (in the event of a current account relationship pursuant to Sec. 355 of the German Commercial Code [Handelsgesetzbuch, HGB] between the buyer and the consumer, a previously assigned claim also refers to a recognized account balance and respectively the existing causal account balance in the case of the consumer’s insolvency.)
The buyer shall remain authorized to collect debt due even after the assignment. Our right to collect the sum due directly shall remain unaffected hereof. However, we undertake to refrain from collecting the debt as long as the buyer complies with his payment obligations arising from the collected proceeds, does not default on payment and in particular as long as no application is lodged for the institution of insolvency proceedings or payments have not been suspended. Should any of these aforementioned situations arise, then we shall be entitled to demand that the customer informs us of the assigned claims and the names of the respective debtors, provides all details necessary for the collection of the sums due, and hands over all associated documentation and informs the debtors (third parties) of the assignment.

6. The processing or transformation of the goods by the buyer shall always be carried out on our behalf. If the goods are processed with products which are not our property, we shall acquire co-ownership of the new material in proportion to the value of the purchased goods (final invoice amount including value-added tax) to the other processed products at the time of processing. For processed items, the same shall apply as for objects of purchase delivered with a reservation.

7. If the object purchased is mixed in an inseparable way with other items which are not our property, then we shall acquire part ownership of the new goods in proportion to the value at the time at which the object of purchase was mixed (final invoice amount including value-added tax) compared to that of the other items mixed. If such mixing has been carried out in such a way that the buyer’s goods must be regarded as the main products, then it is hereby agreed that the buyer assigns part ownership to us in the appropriate proportion. The buyer shall hold the solely owned or partly owned property, which has been produced in this way on our behalf, in safe custody.

8. On the request of the buyer, we undertake to release securities assigned to us to the extent that the realizable value of our securities exceeds the claims to be secured by more than 10%. The choice of which securities should be released shall be at our discretion.

§ 10 Jurisdiction and place of performance

1. Unless otherwise agreed, the place of performance shall be our registered place of business.

2. The place of jurisdiction shall be our registered place of business. We shall also be entitled to take action against the buyer in any other admissible jurisdiction.

3. The laws of the Federal Republic of Germany shall apply to the exclusion of the United Nations Convention on Contracts for the International Sale of Goods.