OR BPA WITH
RESPECT TO THE BUSINESS.
(C)
EACH OF THE COMPANIES AND THE COMPANY SUBSIDIARIES DOES NOT, AND AFTER THE
CLOSING WILL NOT BE OBLIGATED TO, PROVIDE SUBSCRIPTION CLEARING SERVICES FOR
NON-AFFILIATE SUBSCRIPTION ENTITIES.
SECTION 3.27.
PRODUCTS AND INVENTORY.
EXCEPT AS SET FORTH IN SECTION 3.27 OF
THE DISCLOSURE SCHEDULE, SINCE JULY 1, 2005, NEITHER OF THE COMPANIES NOR ANY OF
THE COMPANY SUBSIDIARIES HAS, AND, WITH RESPECT TO THE BUSINESS, NONE OF THE
SELLER OR ANY OF ITS AFFILIATES HAS, RECEIVED ANY WRITTEN NOTICE OR, TO THE
KNOWLEDGE OF THE SELLER, ANY ORAL NOTICE, RELATING TO ANY CLAIM INVOLVING USE OF
OR EXPOSURE TO ANY OF THE PRODUCTS (OR ANY PART OR COMPONENT THEREOF) SOLD OR
SERVICES PERFORMED BY THE BUSINESS OR EITHER OF THE COMPANIES OR ANY OF THE
COMPANY SUBSIDIARIES, INCLUDING FOR NEGLIGENCE, STRICT LIABILITY, DESIGN OR
MANUFACTURING DEFECT, CONSPIRACY, FAILURE TO WARN, BREACH OF EXPRESS OR IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PURPOSE OR USE, OR FROM ANY
ALLEGED BREACH OF IMPLIED WARRANTIES OR REPRESENTATIONS OR ANY ALLEGED
NONCOMPLIANCE WITH ANY APPLICABLE LAWS PERTAINING TO PRODUCTS LIABILITY MATTERS,
OTHER THAN NON-RECURRING CLAIMS, EVENTS AND COMPLAINTS THAT ARE ADDRESSED BY
MANUFACTURERS OR SUPPLIERS TO THE COMPANIES AND THE COMPANY SUBSIDIARIES.
SECTION 3.28.
PRODUCT SALES.
(A)
SECTION 3.28(A) OF THE DISCLOSURE SCHEDULE SETS FORTH FOR EACH OF THE
CALENDAR YEARS ENDED DECEMBER 31, 2006 AND 2007 AND FOR THE SIX-MONTH PERIOD
ENDED JUNE 30, 2008, (I) THE TOTAL PURCHASES AND TOTAL SALES BY VOLUME BY OR ON
BEHALF OF THE COMPANIES AND THEIR AFFILIATES (BROKEN DOWN BY CHANNELS OF
DISTRIBUTION (AS DESCRIBED BELOW)) OF PRODUCTS ("WFC PRODUCTS") SUPPLIED BY WFC
OR ITS AFFILIATES, SUCCESSORS OR PREDECESSORS AND (II) THE RECONCILIATION OF
MINIMUM TONNAGE COMMITMENTS UNDER THE WFC AGREEMENT AND RESULTING SURPLUS OR
SHORTFALL ALONG WITH ASSOCIATED MINIMUM TONNAGE COMMITMENT PENALTY PAYMENT DUE
TO WFC OR ITS AFFILIATES.
SECTION 3.28(A) OF THE DISCLOSURE SCHEDULE ALSO SETS
FORTH THE TOTAL SALES (BY VOLUME) OF WFC PRODUCTS BY OR ON BEHALF OF THE
COMPANIES AND THEIR AFFILIATES FOR THE FALL 2007 SELLING CAMPAIGN.
FOR PURPOSES
HEREOF, THE "CHANNELS OF
42
DISTRIBUTION" ARE U.S. FIELD SALES (THROUGH THE REGULAR FOOD PROGRAM AND GIFT
PROGRAM, EACH BROKEN OUT), EFR SALES, CANADIAN SALES AND OTHER FUNDRAISING
CHANNELS NOT DESCRIBED IN THE FOREGOING AND SALES OUTSIDE THE FUNDRAISING
CHANNEL.
(B)
SECTION 3.28(B) OF THE DISCLOSURE SCHEDULE SETS FORTH, AS OF JUNE 30, 2008,
A TRUE AND CORRECT SCHEDULE OF ALL WFC PRODUCTS IN INVENTORY BROKEN DOWN BY ITEM
NUMBER AND INDICATES THE MONTH OF EXPIRATION AND THE WEIGHT AND THE COST WITH
RESPECT TO EACH SUCH PRODUCT.
(C)
SECTION 3.28(C) OF THE DISCLOSURE SCHEDULE SETS FORTH, FROM JANUARY 1, 2008
THROUGH JUNE 30, 2008, THE NET PURCHASES IN TONNAGE OF WFC PRODUCTS UNDER THE
WFC AGREEMENT.
THE AGGREGATE AMOUNT OF NET PURCHASES OF WFC PRODUCTS MADE BY
THE COMPANIES AND THE COMPANY SUBSIDIARIES FOR THE PERIOD FROM JULY 1, 2008
THROUGH THE CLOSING DATE WILL ON THE CLOSING DATE BE AS