Exhibit
10.1

       

      SHARE
PURCHASE AGREEMENT

       

      This
Share Purchase Agreement (this “Agreement”), dated as of
February 15, 2011, is entered into between Windset Holdings 2010 Ltd., a Canada
corporation (the “Corporation”) and Apio, Inc.,
a Delaware corporation and a wholly-owned subsidiary of Landec Corporation, a
Delaware corporation (the “Investor,” and together with
the Corporation, the “Parties” or each, a “Party”).

       

      RECITALS:

       

      WHEREAS,
the Corporation has authorized 150,000 Senior Preferred shares (the “Senior Preferred Shares”), 186,320 Junior
Preferred shares (the “Junior
Preferred Shares”), and 1,000 Common shares (the “Common Shares”) of the
Corporation; and

       

      WHEREAS,
the Corporation wishes to sell to the Investor, and the Investor wishes to
purchase from the Corporation, all of the Senior Preferred Shares and 201 Common
Shares (collectively, the “Purchased Shares”), subject to
the terms and conditions set forth herein.

       

      NOW,
THEREFORE, in consideration of the mutual covenants and agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:

       

      ARTICLE
I          Definitions

       

      The
following terms have the meanings specified or referred to in this Article I:

       

      “Acre” means a unit of land
area measuring 43,560 square feet.

       

      “Action” means any claim,
action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of
violation, proceeding, litigation, citation, summons, subpoena or investigation
of any nature, civil, criminal, administrative, regulatory or otherwise, whether
at law or in equity.

       

      “Affiliate” of any particular
Person means any other Person controlling, controlled by or under common control
with such particular Person, where “control” means the possession, directly or
indirectly, of the power to direct the management and policies of a Person
whether through the ownership of voting securities, contract or otherwise, or
any Associate thereof; provided that each member of
the Newell Family Group, each member of the Windset Group, Renewable Fibre
Corp., Braeside Breeders Ltd., Sylviaville Enterprises Ltd., Windset Labour
Management Inc., Dr. John P. Newell Medical Services Ltd. and Station Square
Medical Clinic Ltd. shall be deemed “Affiliates” of the
Corporation.

       

      “Affiliate Employment
Agreements” means the executive employment agreements by and between GGFI
and each of Dr. John P. Newell, John Newell, Steven Newell, Sylvia Newell and
Anthony Martin, each dated January 1, 2010.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      “Associate” where used to
indicate a relationship with any Person, means:

       

      
        	
                 
      

              	
                (i)

              	
                any
      Person of which such Person owns, directly or indirectly, voting
      securities carrying more than 10% of the voting rights attached to all
      voting securities of the corporation for the time being
      outstanding;

              


      

       

      
        	
                 
      

              	
                (ii)

              	
                any
      partner of that Person;

              


      

       

      
        	
                 
      

              	
                (iii)

              	
                any
      trust or estate in which such Person has a substantial beneficial interest
      or as to which such Person serves as a trustee or in a similar
      capacity;

              


      

       

      
        	
                 
      

              	
                (iv)

              	
                any
      relative of that Person who resides in the same home as such
      Person;

              


      

       

      
        	
                 
      

              	
                (v)

              	
                any
      Person who resides in the same home as that Person and to whom that Person
      is married or with whom that Person is living in a conjugal relationship
      outside marriage; or

              


      

       

      
        	
                 
      

              	
                (vi)

              	
                any
      relative of a Person mentioned in clause (v) who has the same home as that
      Person.

              


      

       

      “Agreement” has the
meaning set forth in the preamble.

       

      “Audited Financial
Statements” has the meaning set forth in Section 3.05.

       

      “Balance Sheet” has the
meaning set forth in Section
3.05.

       

      “Balance Sheet Date” has
the meaning set forth in Section 3.05.

       

       “Business Day” means any day of
the year, other than a Saturday, Sunday or any day on which major banks are
closed for business in Vancouver, British Columbia and San Francisco,
California.

       

      “Business” means the business
of the Windset Group as conducted on the date hereof and as proposed to be
conducted, including the operation of greenhouses, and the marketing,
distribution and sale of fruits and vegetables, in Canada and the United
States.

       

      “Canadian Credit Agreements”
means the Credit Agreement dated December 20, 2010 between GGFI and HSBC and the
Credit Agreement dated December 21, 2010 between GGFI and FCC (as the same may
be amended from time to time).

       

      “Closing” has the meaning
set forth in Section
2.04.

       

      “Closing Date” has the
meaning set forth in Section
2.04.

       

      “Code” means the Internal
Revenue Code of 1986, as amended.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      “Constating Documents” means
the certificate of incorporation, amalgamation, continuance or other formation
and the by-laws, articles, memorandum or other organizational documents of a
Person, as applicable.

       

       “Contractor” means any person,
including an advisor but not an Employee, who is engaged by any member of the
Windset Group or any Related Party to render services (other than
capital-raising services) for the Business and is compensated for such
services.

       

      “Contracts” means all
contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments,
undertakings, indentures, joint ventures and all other agreements, commitments
and legally binding arrangements, whether written or oral.

       

      “Corporation” has the
meaning set forth in the preamble.

       

      “Disclosure
Schedules” means the Disclosure Schedules delivered by the
Corporation and the Investor concurrently with the execution and delivery of
this Agreement.

       

      “Dollars” or “US$”  means the
lawful currency of the United States.

       

      “Employees” means those
Persons employed immediately prior to the Closing by any member of the Windset
Group.

       

      “Encumbrance” means any
charge, claim, community property interest, pledge, condition, equitable
interest, lien (statutory or other), option, security interest, mortgage,
easement, encroachment, right of way, right of first refusal, or restriction of
any kind, including any restriction on use, voting, transfer, receipt of income
or exercise of any other attribute of ownership.

       

      “Environmental
Claim” means any Action, Governmental Order, lien, fine, penalty,
or, as to each, any settlement or judgment arising therefrom, by or from any
Person alleging liability of whatever kind or nature (including liability or
responsibility for the costs of enforcement proceedings, investigations,
cleanup, governmental response, removal or remediation, natural resources
damages, property damages, personal injuries, medical monitoring, penalties,
contribution, indemnification and injunctive relief) arising out of, based on or
resulting from: (a) the presence, Release of, or exposure to, any Hazardous
Materials; or (b) any actual or alleged non-compliance with any Environmental
Law or term or condition of any Environmental Permit.

       

      “Environmental
Notice” means any written directive, notice of violation or
infraction, or notice respecting any Environmental Claim relating to actual or
alleged non-compliance with any Environmental Law or any term or condition of
any Environmental Permit.

       

      “Environmental
Permit” means any Permit, letter, clearance, consent, waiver,
closure, exemption, decision or other action required under or issued, granted,
given, authorized by or made pursuant to Environmental Law.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      “FCC” means Farm Credit
Canada.

       

      “FCC Side Letter” has the
meaning set forth in Section
6.01(c).

       

       “Financial Statements” has
the meaning set forth in Section 3.05.

       

      “GAAP” means those accounting
principles which are recognized as being generally accepted in Canada from time
to time as set forth in the Handbook published by The Canadian Institute of
Chartered Accountants (as revised from time to time).

       

      “GGFI” means Greenhouse Grown
Foods, Inc.

       

      “Governmental
Authority” means any federal, state, local or foreign government or
political subdivision thereof, or any agency or instrumentality of such
government or political subdivision, or any self-regulated organization or other
non-governmental regulatory authority or quasi-governmental authority (to the
extent that the rules, regulations or orders of such organization or authority
have the force of Law), or any arbitrator, court or tribunal of competent
jurisdiction.

       

      “Governmental Order” means
any order, writ, judgment, injunction, decree, stipulation, determination or
award entered by or with any Governmental Authority.

       

      “Hazardous
Materials” means: (a) any material, substance, chemical, waste,
product, derivative, compound, mixture, solid, liquid, mineral or gas, in each
case, whether naturally occurring or manmade, that is hazardous, acutely
hazardous, toxic, or words of similar import or regulatory effect under
Environmental Laws; and (b) any petroleum or petroleum-derived products, radon,
radioactive materials or wastes, asbestos in any form, lead or lead-containing
materials, urea formaldehyde foam insulation, and polychlorinated
biphenyls.

       

      “HSBC” means HSBC Bank
Canada.

       

      “Insurance Policies” has
the meaning set forth in Section 3.17.

       

      “Intellectual Property” means
all patents, patent rights, trademarks, trademark rights, trade names, trade
name rights, service marks, copyrights, and any applications for any of the
foregoing, maskworks, net lists, schematics, industrial models, inventions,
technology, know-how, trade secrets, inventory, ideas, algorithms, processes,
computer software programs or applications (in both source code and object code
form), and tangible or intangible proprietary information or material that are
used in the Business of the Corporation.

       

      “Interim Balance
Sheet” has the meaning set forth in Section 3.05.

       

      “Interim Balance Sheet
Date” has the meaning set forth in Section 3.05.

       

      “Interim Financial
Statements” has the meaning set forth in Section 3.05.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      “Investor” has the meaning
set forth in the preamble.

       

       “Knowledge” or any other
similar knowledge qualification, means the actual or constructive knowledge of
any director or officer of the Corporation, after due inquiry, and shall include
Dr. John P. Newell, Sylvia Helen Newell, Steven Newell, John Newell and Anthony
Martin.

       

      “Law” means any statute,
law, ordinance, regulation, rule, code, order, constitution, treaty, common law,
judgment, decree, other requirement or rule of law of any Governmental
Authority.

       

      “Liabilities” has the
meaning set forth in Section
3.08.

       

      “Losses” means losses
(including any that arise from the failure of the Corporation or any member of
the Windset Group to satisfy any obligation to the Investor pursuant to the
Transaction Documents), damages, Liabilities (including any tax Liabilities
resulting from indemnification payments), deficiencies, Actions, judgments,
interest, awards, penalties, fines, costs or expenses of whatever kind,
including reasonable legal, Tax, accounting and other expenses, and the cost of
enforcing any right to indemnification hereunder and the cost of pursuing any
insurance providers; provided,
however, that “Losses” shall not include
punitive damages, except in the case of fraud, wilful breach or intentional
misrepresentation or to the extent actually awarded to a Governmental Authority
or other third party.

       

      “Material Adverse
Effect” means any event, occurrence, fact, condition or change that
is, or could reasonably be expected to become, individually or in the aggregate,
materially adverse to (a) the business, results of operations, prospects,
condition (financial or otherwise) or assets of the Windset Group, individually
or in the aggregate, or (b) the ability of the Windset Group, individually or in
the aggregate, to consummate the transactions contemplated hereby on a timely
basis.

       

      “Material Contracts” has
the meaning set forth in Section 3.10(a).

       

      “MOU” means the memorandum of
understanding dated October 8, 2009, by and between Landec and Windset
California.

       

      “Newell Family Group” means Dr.
John P. Newell, Sylvia Helen Newell, John Newell, Steven Newell, Newell Capital
Corporation, Newell Family Trust, Braeside Breeders Ltd., Windset Trust, Windset
North Trust, Dr. John P. Newell Medical Services Ltd. and Station Square Medical
Clinic Inc.

       

      “Option Agreement” means the
Agreement and Option to Purchase Real Property, dated July 2, 2009, by and
between NKT O’Donnell, LLC and Windset California.

       

      “Party” has the meaning set
forth in the preamble.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      “Permits” means all
permits, licenses, franchises, approvals, authorizations, registrations,
certificates, variances and similar rights obtained, or required to be obtained,
from Governmental Authorities.

       

      “Permitted
Encumbrances” has the meaning set forth in Section 3.12(a).

       

      “Person” means an
individual, corporation, partnership, joint venture, limited liability company,
Governmental Authority, unincorporated organization, trust, association or other
entity.

       

      “Plans” means all plans,
arrangements, agreements, programs, policies or practices (whether written or
oral, formal or informal, funded or unfunded, insured or self-insured,
registered or unregistered) to which any member of the Windset Group is a party
or by which any member of the Windset Group is bound or under which any member
of the Windset Group has any liability or contingent liability or which has any
application to any member of the Windset Group’s Employees (including directors,
officers, retired Employees, Employees on leave, former Employees, individuals
working on contract with any member of the Windset Group or other individuals
providing services to any member of the Windset Group of a kind normally
provided by Employees) or their dependants or beneficiaries and consisting of or
relating to, as the case may be, any one or more of the following:

       

       (i) retirement savings or
pensions, including any defined benefit pension plan, defined contribution
pension plan, group registered retirement savings plan, or supplemental pension
or retirement plan;

       

      (ii) any bonus, incentive pay or
compensation, performance compensation, deferred compensation, profit sharing or
deferred profit sharing, share purchase, stock option, stock appreciation, stock
purchase, phantom stock, vacation or vacation pay, sick pay, severance or
termination pay, employee loans or separation from service benefits, or other
type of plan or arrangement providing for compensation or benefits additional to
base pay or salary; and

       

      (iii) disability or wage
continuation benefits during periods of absence from work (including short-term
disability, long-term disability and worker’s compensation benefits) or any
other benefit, including supplemental unemployment, hospitalization, health,
medical/dental, disability, life insurance, death or survivor benefits,
employment insurance, vacation pay, severance or termination pay, and fringe
benefits;

       

      excluding
all statutory plans with which any member of the Windset Group is required to
comply (including the Canada Pension Plan and plans administered pursuant to
applicable provincial health tax, workers compensation and unemployment
insurance legislation).

       

      “Plan Documents” means texts
and all amendments to all Plans, trust and funding agreements and amendments,
pension Contracts, applicable insurance Contracts, actuarial valuations,
financial statements, all material internal memoranda concerning the Plans,
annual information returns, relevant employee, former employee and pensioner
data, all booklets, summaries, manuals and written communications of a general
nature distributed or made available to any Employees or former Employees and
correspondence with any Governmental Authorities in respect of
Plans.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      “Purchase Price” has the
meaning set forth in Section
2.02.

       

      “Purchased Shares” has the meaning
set forth in the recitals.

       

      “Real Property” means the
real property owned, leased or subleased by the Corporation, together with all
buildings, structures and facilities located thereon.

       

      “Related Party” means (i) each
member of the Newell Family Group, (ii) each director and executive officer of
each member of the Windset Group, and (iii) the Associates and Affiliates, as
applicable, of each of the foregoing Persons; provided that each member of
the Newell Family Group, each member of the Windset Group, Renewable Fibre
Corp., Braeside Breeders Ltd., Sylviaville Enterprises Ltd., Windset Labour
Management Ltd., Dr. John P. Newell Medical Services Ltd. and Station Square
Medical Clinic Ltd. shall each be deemed “Related Party” of the Windset
Group.

       

      “Related Party Agreement” has
the meaning given in Section 3.11.

       

      “Release” means any actual
or threatened release, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, abandonment, disposing or
allowing to escape or migrate into or through the environment (including,
without limitation, ambient air (indoor or outdoor), surface water, groundwater,
land surface or subsurface strata or within any building, structure, facility or
fixture).

       

      “Representative” means,
with respect to any Person, any and all directors, officers, Employees,
Contractors, consultants, financial advisors, counsel, accountants and other
agents of such Person.

       

      “Restricted
Business” means the growing of hydroponic lettuce.

       

      “Restricted Period” has
the meaning set forth in Section 5.03(a).

       

      “RNA Facility” means the
US$45,000,000 credit facility made available to Windset California pursuant to
the terms of a credit agreement dated February 15, 2011 by and among Windset
California, as borrower, Rabobank, N.A., as lender, and Rabobank, N.A. as
collateral agent.

       

      “Senior Preferred Shares” has
the meaning set forth in the recitals.

       

      “Share Certificates” has the
meaning set forth in Section
2.03(b).

       

      “Shareholders’ Agreement” has
the meaning set forth in Section
6.02(m).


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      “Shares” means the Common
Shares, Junior Preferred Shares and Senior Preferred Shares, or any of them, as
the context may require.

       

       “Subsidiary” means, with
respect to any Person, any corporation, limited liability company, partnership,
association or other business entity of which (i) if a corporation, a majority
of the total voting power of shares entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof, or (ii) if a limited liability company, partnership, association or
other business entity, a majority of the limited liability company, partnership
or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that Person
or a combination thereof, and for purposes hereof, a Person or Persons shall be
deemed to have a majority ownership interest in a limited liability company,
partnership, association or other business entity if such Person or Persons
shall be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or control the
manager, general partner, trustee, or Persons with similar authority of such
limited liability company, partnership, association or other business
entity.

       

      “Tax Act” means the Income Tax
Act (Canada).

       

      “Taxes” means all federal,
state, local, foreign and other income, gross receipts, sales, use, production,
ad valorem, transfer, franchise, registration, profits, license, lease, service,
service use, withholding, payroll, employment, unemployment, estimated, excise,
severance, environmental, stamp, occupation, premium, property (real or
personal), real property gains, windfall profits, customs, duties or other
taxes, fees, assessments or charges of any kind whatsoever, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties.

       

      “Tax Authority” means, with
respect to any Tax, the Governmental Authority that imposes such Tax, and the
agency (if any) charged with the collection of such Tax for such Governmental
Authority.

       

       “Tax Sharing Arrangement”
means any written or unwritten agreement or arrangement for the allocation or
payment of Tax liabilities or payment for tax benefits.

       

      “Tax Return” means any
return, declaration, report, claim for refund, information return or statement
or other document relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.

       

      “Territory” means Canada,
the United States and Mexico.

       

      “Transaction
Documents” means this Agreement, the Shareholders’ Agreement and
Schedule “A” to the Articles of the Corporation.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      “U.S. Facility” means the Phase
I and Phase II greenhouse, the 221 Acres on which the Phase I and Phase II
greenhouse will be located and the associated water treatment plant, heating and
cooling plant, packing plant, distribution facility, and administration facility
proposed to be built in the City of Santa Maria, California in connection with
the Business.

       

      “WARN Act” means the
federal Worker Adjustment and Retraining Notification Act of 1988, and similar
state, local and foreign laws related to plant closings, relocations, mass
layoffs and employment losses.

       

      “Windset California” means
Windset Farms (California), Inc.

       

      “Windset Group” means the
Corporation and each of its Subsidiaries or their predecessors, as the case may
be and as the context may require; and “member of the Windset Group”
means any one of them.

       

      ARTICLE
II     Purchase and sale

       

      Section
2.01   Purchase and
Sale.  Subject to the terms and conditions set forth herein, at
the Closing, the Corporation shall sell to the Investor, and the Investor shall
purchase from the Corporation, the Purchased Shares, which, after the purchase,
will constitute (x) 100% of the outstanding Senior Preferred Shares of the
Corporation, and (y) 20.1% of the outstanding Common Shares of the Corporation,
free and clear of all Encumbrances.

       

      Section
2.02   Purchase Price.  The
aggregate purchase price for the Purchased Shares shall be US$15,000,201 (the
“Purchase
Price”).  The purchase price for the Senior Preferred Shares
shall be US$15,000,000 and the purchase price for the Common Shares shall be
US$201.

       

      Section 2.03  
Transactions to be Effected at the Closing.

       

      (a)          At
the Closing, the Investor shall deliver to the Corporation:

       

      (i)           the
Purchase Price by wire transfer of immediately available funds to an account of
the Corporation, such account to be designated in writing by the Corporation to
the Investor; and

       

      (ii)           the
Transaction Documents and all other agreements, documents, instruments or
certificates required to be delivered by the Investor at or prior to the Closing
pursuant to Section 6.03
of this Agreement.

       

      (b)          At
the Closing, the Corporation shall deliver to the Investor:

       

      (i)           a
share certificate evidencing the Senior Preferred Shares and a share certificate
evidencing the Common Shares purchased by the Investor (collectively, the “Share Certificates”);
and

       

      (ii)           the
Transaction Documents and all other agreements, documents, instruments or
certificates required to be delivered by the Corporation at or prior to the
Closing pursuant to Section
6.02 of this Agreement.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      Section
2.04   Closing.  Subject to
the terms and conditions of this Agreement, the purchase and sale of the
Purchased Shares contemplated hereby shall take place at a closing (the “Closing”) to be held at 10:00
a.m., California time on February 15, 2011, at the offices of Orrick, Herrington
& Sutcliffe LLP, 405 Howard St., San Francisco, California 94105, or at such
other time or on such other date or at such other place as the Corporation and
the Investor may mutually agree upon in writing (the day on which the Closing
takes place being the “Closing
Date”).

       

      Section
2.05   Use of
Funds.  The Corporation covenants to use all of the Purchase
Price (excluding any costs and expenses associated with the consummation of this
Agreement) to fund a portion of an equity infusion to be made by the Corporation
into Windset Holdings Ltd., who in turn will make a corresponding equity
infusion into Windset Holdings USA Inc., who in turn will make a corresponding
equity infusion into Windset California to enable Windset California to arrange
construction financing and term financing as required under the RNA Facility to
purchase 221 Acres and build and operate an approximately 64-Acre greenhouse in
Santa Maria, California.

       

      ARTICLE
III   Representations and warranties of Each Member of the Windset
Group

       

      Except as
set forth in the correspondingly numbered Section of the Disclosure Schedules,
each member of the Windset Group represents and warrants to the Investor,
severally and not jointly, that the statements contained in this Article III are true and
correct as of the date hereof.

       

      Section
3.01   Organization, Authority and
Qualification of each member of the Windset Group.  Each member
of the Windset Group is a duly organized, validly existing and in good standing
and has full corporate power and authority to own, operate or lease the
properties and assets now owned, operated or leased by it and to carry on its
business as it has been and is currently conducted.  Schedule 3.01 of the
Disclosure Schedules sets forth each jurisdiction in which each member of the
Windset Group is licensed or qualified to do business, and each member of the
Windset Group is duly licensed or qualified to do business and is in good
standing in each jurisdiction in which the properties owned or leased by it or
the operation of its business as currently conducted makes such licensing or
qualification necessary except for any jurisdiction(s) in which the failure to
so qualify would not have a Material Adverse Effect. All corporate actions taken
by each member of the Windset Group in connection with this Agreement and the
other Transaction Documents will be duly authorized on or prior to the
Closing.  None of such actions will result in any violation of, be in
conflict with, or constitute a default, in any material respect, under any of
its organizational documents or any law, statute, regulation, ordinance,
contract, agreement, instrument, judgment, decree or order to which each member
of the Windset Group is a party or by which each member of the Windset Group or
its assets may be bound.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Section 3.02  
Capitalization.


       

      (a)           Immediately
prior to the sale of the Purchased Shares to the Investor, the authorized
capital stock of the Corporation consists of 1,000 Common Shares, 799 of which
are issued and outstanding, 186,320 Junior Preferred Shares, all of which are
issued and outstanding, and 150,000 Senior Preferred Shares, none of which are
issued and outstanding. Schedule 3.02(a) sets forth
the Corporation’s capitalization immediately prior the sale of the Purchased
Shares, including the Shares outstanding, the names of the Persons holding the
Shares and the tax residency of each of such Persons.  All of the
Shares have been duly authorized, and all of the issued and outstanding Shares
and are validly issued, fully paid and non-assessable, and are free and clear of
all Encumbrances. Upon consummation of the transactions contemplated by this
Agreement, the Investor shall own all of the Purchased Shares, free and clear of
all Encumbrances, and the capitalization of the Corporation shall be as set
forth in Schedule
3.02(a).

       

      (b)           All
of the Shares have been issued in compliance with applicable Laws. None of the
Shares have been issued in violation of any agreement, arrangement or commitment
to which each member of the Windset Group is a party or is subject to or in
violation of any preemptive or similar rights of any Person.

       

      (c)           Other
than as set forth in Schedule
3.02(c), there are no outstanding or authorized options, warrants,
convertible securities or other rights, agreements, arrangements or commitments
of any character relating to the capital stock of each member of the Windset
Group or obligating each member of the Windset Group to issue or sell any shares
of capital stock of, or any other interest in, each member of the Windset Group.
Each member of the Windset Group does not have outstanding or authorized any
stock appreciation, phantom stock, profit participation or similar rights. Other
than the Shareholders’ Agreement, there are no voting trusts, shareholder
agreements, proxies or other agreements or understandings in effect with respect
to the voting or transfer of any of the Shares.

       

      Section
3.03   No
Subsidiaries. Except as set forth in Schedule 3.03, each member of the
Windset Group does not, directly or indirectly, own or have the right to acquire
any equity interest in any corporation, limited liability company, partnership,
joint venture, trust or other business organization.  Schedule 3.03
sets forth a true and correct copy of the organization chart of the Windset
Group.

       

      Section
3.04   No
Conflicts; Consents.  The execution, delivery and performance
by the Corporation of this Agreement and the other Transaction Documents, and
the consummation of the transactions contemplated hereby and thereby, do not and
will not: (a) conflict with or result in a violation or breach of, or default
under, any provision of the certificate of incorporation, by-laws or other
organizational documents of each member of the Windset Group; (b) conflict with
or result in a violation or breach of any provision of any Law or Governmental
Order applicable to each member of the Windset Group; (c) require the
consent, notice or other action by any Person under, conflict with, result in a
violation or breach of, constitute a default or an event that, with or without
notice or lapse of time or both, would constitute a default under, result in the
acceleration of or create in any party the right to accelerate, terminate,
modify or cancel any Contract to which each member of the Windset Group is a
party or by which each member of the Windset Group is bound or to which any of
their respective properties and assets are subject (including any Material
Contract) or any Permit affecting the properties, assets or business of each
member of the Windset Group; or (d) result in the creation or imposition of any
Encumbrance other than Permitted Encumbrances on any properties or assets of
each member of the Windset Group. No consent, license, order, permit, approval,
authorization, declaration of, payment to or filing with any Governmental
Authority (collectively, “Authorizations”) is required
by or with respect to each member of the Windset Group in connection with the
execution and delivery of this Agreement and the other Transaction Documents and
the consummation of the transactions contemplated hereby and
thereby.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      Section
3.05    Financial
Statements.  Complete copies of the Windset Group’s audited
financial statements consisting of the balance sheet of the Windset Group as of
December 31, 2009 and December 31, 2008 and the related statements of income and
retained earnings, shareholders’ equity and cash flow for the years then ended
(the “Audited Financial
Statements”), and unaudited financial statements consisting of the
balance sheet of the Windset Group as of September 25, 2010, and the related
statements of income and retained earnings, shareholders’ equity and cash flow
for the nine month period then ended (the “Interim Financial Statements”
and together with the Audited Financial Statements, the “Financial Statements”) have
been made available to the Investor. The Financial Statements have been prepared
in accordance with GAAP applied on a consistent basis throughout the period
involved, subject, in the case of the Interim Financial Statements, to normal
and recurring year-end adjustments (the effect of which will not be materially
adverse) and the absence of notes (that, if presented, would not differ
materially from those presented in the Audited Financial Statements). The
Financial Statements are based on the books and records of the Windset Group,
and fairly present the financial condition of the Windset Group as of the
respective dates they were prepared and the results of the operations of the
Windset Group for the periods indicated. The balance sheet of the Windset Group
as of December 31, 2009 is referred to herein as the “Balance Sheet” and the date
thereof as the “Balance Sheet
Date” and the balance sheet of the Windset Group as of September 25, 2010
is referred to herein as the “Interim Balance Sheet” and the
date thereof as the “Interim
Balance Sheet Date.”  Each member of the Windset Group
maintains a standard system of accounting established and administered in
accordance with GAAP.

       

      Section
3.06    Working
Capital.  Schedule 3.06 sets forth the working capital of the
Windset Group (the “Working
Capital”). The Working Capital represents an amount sufficient (taking
into account funds available to the Windset Group following payment of the
Purchase Price by the Investor and the closing of the RNA Facility) to complete
construction and start up of the U.S. Facility and to conduct the Windset
Group’s operations in the ordinary course of business consistent with past
practice during the period beginning on the Closing Date and ending 36 months
thereafter.

       

      Section
3.07    Inventories.  The
inventories of each member of the Windset Group (i) are in good,
merchantable and usable condition, (ii) are reflected in the Balance Sheet
at the lower of cost or market in accordance with GAAP, and (iii) are of a
quality and quantity usable in the ordinary course of business.  The
inventory obsolescence policies of each member of the Windset Group are
appropriate for the nature of the products sold and the marketing methods used
by each member of the Windset Group, the reserve for inventory obsolescence
contained in the Balance Sheet fairly reflects the amount of obsolete inventory
as of its date.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      Section
3.08    Undisclosed
Liabilities.  Each member of the Windset Group has no
liabilities, obligations or commitments of any nature whatsoever, asserted or
unasserted, known or unknown, absolute or contingent, accrued or unaccrued,
matured or unmatured or otherwise (collectively, “Liabilities”), except
(a) those which are adequately reflected or reserved against in the Balance
Sheet as of the Balance Sheet Date, and (b) those which have been incurred in
the ordinary course of business consistent with past practice since the Balance
Sheet Date and which are not, individually or in the aggregate, material in
amount.

       

      Section
3.09    Absence of Certain Changes, Events
and Conditions.  Except as provided in Schedule 3.09 of the
Disclosure Schedules, since December 31, 2009, and other than in the ordinary
course of business consistent with past practice, there has not been, with
respect to each member of the Windset Group, any:

       

      (a)          event,
occurrence or development that has had, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect;

       

      (b)          other
than as may be effected in connection with the consummation of the transactions
contemplated by this Agreement, amendment of the charter, by-laws or other
organizational documents of each member of the Windset Group;

       

      (c)          split,
combination or reclassification of any shares of its capital stock;

       

      (d)          issuance,
sale or other disposition of any of its capital stock, or grant of any options,
warrants or other rights to purchase or obtain (including upon conversion,
exchange or exercise) any of its capital stock;

       

      (e)          declaration
or payment of any dividends or distributions on or in respect of any of its
capital stock or redemption, purchase or acquisition of its capital
stock;

       

      (f)           material
change in any method of accounting or accounting practice of the Windset Group,
except as required by GAAP or as disclosed in the notes to the Financial
Statements;

       

      (g)          material
change in each member of the Windset Group’s cash management practices and its
policies, practices and procedures with respect to collection of accounts
receivable, establishment of reserves for uncollectible accounts, recording of
accounts receivable, inventory control, prepayment of expenses, payment of trade
accounts payable, accrual of other expenses, deferral of revenue and acceptance
of customer deposits;

       

      (h)          other
than pursuant to the Canadian Credit Agreements and the RNA Facility,
incurrence, assumption or guarantee of any indebtedness for borrowed money
except unsecured current obligations and Liabilities incurred in the ordinary
course of business consistent with past practice;

       

      (i)           transfer,
assignment, sale or other disposition of any of the assets shown or reflected in
the Balance Sheet or cancellation of any debts or entitlements;


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (j)           transfer,
assignment or grant of any license or sublicense of any material rights under or
with respect to any Intellectual Property;

       

      (k)          material
damage, destruction or loss (whether or not covered by insurance) to its
property;

       

      (l)           any
capital investment in, or any loan to, any other Person;

       

      (m)         acceleration,
termination, material modification to or cancellation of any material Contract
(including, but not limited to, any Material Contract) to which each member of
the Windset Group is a party or by which it is bound;

       

      (n)          any
material capital expenditures other than the U.S. Facility;

       

      (o)          other
than pursuant to the Canadian Credit Agreements, imposition of any Encumbrance
upon any of the Windset Group’s properties, capital stock or assets, tangible or
intangible;

       

      (p)          grant
of any bonuses, whether monetary or otherwise, or any general wage or salary
increases in respect of its Employees or Contractors, other than as provided for
in any written agreements or consistent with past practice, or change in the
terms of employment or service for any Employee or Contractor;

       

      (q)          other
than the Affiliate Employment Agreements, entry into or termination of any
employment agreement or collective bargaining agreement, written or oral, or
modification of the terms of any such existing agreement;

       

      (r)           any
loan to, or entry into any other transaction with, any of its directors,
officers, Employees, or Contractors, outside the ordinary course;

       

      (s)          entry
into a new line of business or abandonment or discontinuance of existing lines
of Business;

       

      (t)           adoption
of any plan of merger, consolidation, reorganization, liquidation or dissolution
or filing of a petition in bankruptcy under any provisions of federal or state
bankruptcy Law or consent to the filing of any bankruptcy petition against it
under any similar Law;

       

      (u)          purchase,
lease or other acquisition of the right to own, use or lease any Real Property
or assets for an amount in excess of US$500,000, individually (in the case of a
lease, per annum) or US$1,000,000 in the aggregate (in the case of a lease, for
the entire term of the lease, not including any option term), except for
purchases of inventory or supplies in the ordinary course of business consistent
with past practice;

       

      (v)          acquisition
by merger or consolidation with, or by purchase of a substantial portion of the
assets or stock of, or by any other manner, any business or any Person or any
division thereof;

       

      (w)         adoption,
amendment, modification or termination of any bonus, profit sharing, incentive,
severance, or other plan, Contract or commitment for the benefit of any of its
directors, officers, Employees and Contractors (or any such action taken with
respect to any other benefit plan);


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (x)           action
by any member of the Windset Group to make, change or rescind any Tax election,
amend any Tax Return or take any position on any Tax Return, take any action,
omit to take any action or enter into any other transaction that would have the
effect of increasing the Tax liability; or

       

      (y)      
    any Contract to do any of the foregoing, or any action
or omission that would result in any of the foregoing.

       

      Section 3.10  
Material Contracts.

       

      (a)          Schedule 3.10(a) of the
Disclosure Schedules lists each of the following Contracts of all members of the
Windset Group (such Contracts, together with all Contracts concerning the
occupancy, management or operation of any Real Property (including without
limitation, brokerage contracts) listed or otherwise disclosed in Schedule
3.12(a) of the Disclosure Schedules and all Contracts relating to Intellectual
Property set forth in Schedule 3.14 of the Disclosure Schedules, being “Material
Contracts”):

       

      (i)       each
Contract of any member of the Windset Group involving aggregate consideration in
excess of US$1,000,000 and which, in each case, cannot be cancelled by such
member of the Windset Group without penalty or without more than 90 days’
notice;

       

      (ii)      all
Contracts with annual payments or payables equal or greater to US$100,000 that
require any member of the Windset Group to purchase its total requirements of
any product or service from a third party or that contain “take or pay”
provisions;

       

      (iii)     all
Contracts that provide for the indemnification or guarantee by any member of the
Windset Group of any Person or the assumption of any Tax, environmental or other
Liability of any Person;

       

      (iv)     all
Contracts that relate to the acquisition or disposition of any business, a
material amount of shares or assets of any other Person or any real property
(whether by merger, sale of shares, sale of assets or otherwise);

       

      (v)      all
broker, distributor, dealer, manufacturer’s representative, franchise, agency,
sales promotion, market research, marketing consulting and advertising Contracts
to which any member of the Windset Group is a party;

       

      (vi)     except
as set forth in the Affiliate Employment Agreements, all employment agreements
and Contracts with Employees, Contractors or consultants (or similar
arrangements) to which any member of the Windset Group is a party and which are
not cancellable without material penalty or without more than 90 days’
notice;

       

      (vii)    except
for Contracts relating to trade receivables, all Contracts relating to
indebtedness (including, without limitation, guarantees) of any member of the
Windset Group;

       

      (viii)   all
Contracts with any Governmental Authority to which any member of the Windset
Group is a party;


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (ix)      all
Contracts that limit or purport to limit the ability of any member of the
Windset Group to compete in any line of business or with any Person or in any
geographic area or during any period of time;

       

      (x)       any
Contracts to which any member of the Windset Group is a party that provide for
any joint venture, partnership or similar arrangement by any member of the
Windset Group;

       

      (xi)      all
collective bargaining agreements or Contracts with any labor organization, union
or association to which any member of the Windset Group is a party;

       

      (xii)     written
Contracts of any member of the Windset Group with officers, directors and
Affiliates of the Windset Group; and

       

      (xiii)    any
other Contract with annual payments or payables equal or greater to US$100,000
that is material to any member of the Windset Group and not previously disclosed
pursuant to this Section
3.10.

       

      (b)          Each
Material Contract is valid and binding on any member of the Windset Group in
accordance with its terms and is in full force and effect. None of the Windset
Group members or any other party thereto is in breach of or default under (or is
alleged to be in breach of or default under), or has provided or received any
notice of any intention to terminate, any Material Contract. No event or
circumstance has occurred that, with notice or lapse of time or both, would
constitute an event of default under any Material Contract or result in a
termination thereof or would cause or permit the acceleration or other changes
of any right or obligation or the loss of any benefit thereunder. Complete and
correct copies of each Material Contract (including all modifications,
amendments and supplements thereto and waivers thereunder) have been made
available to the Investor.

       

      Section
3.11    Related Party
Agreements.

       

      (a)          Schedule
3.11(a) sets out, with specificity, (x) all amounts owed to or by any member of
the Windset Group under Contracts as of December 31, 2009 and December 31, 2010
with any Related Party (the “Related Party Agreements”);
and (y) all amounts paid to or by any member of the Windset Group to or by a
Related Party in the previous three (3) fiscal years.

       

      (b)          Except
as set out in Schedule 3.11(b), no member of the Windset Group has any
outstanding Indebtedness or Liability for amounts owing to (including for cash
advances or negative cash balances), or notes or accounts receivable from, or
leases, Contracts or other commitments or arrangements with or for the benefit
of any Related Party.

       

      (c)          Except
as set out in Schedule 3.11(c), no Related Party possesses, directly or
indirectly, any financial interest in, or is a director, officer or employee of,
any Person which is a client, supplier, customer, lessor, lessee or competitor
or potential competitor of the Windset Group or the Business. For the purposes
of this Section 3.11(c), ownership of securities of 2% or less of any class of
such securities that are listed and traded on a recognized stock exchange or
trading system shall not be deemed to be a financial interest.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (d)           Except
as set out in Schedule 3.11(d), (i) no indebtedness, claim, liability or
obligation of any member of the Windset Group is guaranteed by any Related
Party, and (ii) no member of the Windset Group is a guarantor or co-obligor of
any Indebtedness, Claim, liability or obligation of any Related Party of the
Windset Group.

       

      Section
3.12    Title to Assets; Real Property.

       

      (a)          Each
member of the Windset Group has good and valid (and, in the case of Real
Property owned by any member of the Windset Group (“Owned Real Property”), good
and marketable fee simple) title to, or a valid leasehold interest in, all Real
Property and personal property, including but not limited to Corporation
Intellectual Property, and other assets reflected in the Audited Financial
Statements or acquired after the Balance Sheet Date, other than properties and
assets sold or otherwise disposed of in the ordinary course of business
consistent with past practice since the Balance Sheet Date. All such properties
and assets (including leasehold interests) are free and clear of Encumbrances
except for the following (collectively referred to as “Permitted
Encumbrances”):

       

      (i)       those
items set forth in Schedule
3.12(a) of the Disclosure Schedules;

       

      (ii)      liens
for Taxes not yet due and payable or being contested in good faith by
appropriate procedures and for which there are adequate accruals or reserves on
the Balance Sheet;

       

      (iii)     mechanics,
carriers’, workmen’s, repairmen’s or other like liens arising or incurred in the
ordinary course of business consistent with past practice or amounts that are
not delinquent and which are not, individually or in the aggregate, material to
the business of any member of the Windset Group;

       

      (iv)     easements,
rights of way, zoning ordinances and other similar encumbrances affecting Real
Property which are not, individually or in the aggregate, material to the
business of any member of the Windset Group; or

       

      (v)      other
than with respect to Owned Real Property and the Canadian Credit Agreements,
liens arising under original purchase price conditional sales contracts and
equipment leases with third parties entered into in the ordinary course of
business consistent with past practice which are not, individually or in the
aggregate, material to the business of any member of the Windset
Group.

       

      (b)          Each
member of the Windset Group has received or shall receive in a timely fashion
all permits and licenses required for the development, construction and
operation of the U.S. Facility and the Business. Schedule 3.12(b) sets
forth: (i) all such permits and licenses currently held by a member of the
Windset Group, and (ii) as of the Closing Date, and after taking into effect the
transactions contemplated by this Agreement, the aggregate amount of capital
spent on the development and construction of the U.S. Facility. As of the
Closing Date, the Windset Group possesses sufficient and adequate capital to
complete the development and construction of the U.S. Facility as described on
Schedule 3.12. Each member of the Windset Group has taken all actions necessary
or desirable to exercise its option pursuant to the Option Agreement, and there
are no unsatisfied or unwaived conditions precedent to the exercise by any
member of the Windset Group of such option.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (c)          Schedule
3.12(c) of the Disclosure Schedules lists (i) the street address of each parcel
of Real Property; (ii) if such property is leased or subleased by any member of
the Windset Group, the landlord under the lease, the rental amount currently
being paid, and the expiration of the term of such lease or sublease for each
leased or subleased property; and (iii) the current use of such property. With
respect to Owned Real Property, each member of the Windset Group has delivered
or made available to the Investor true, complete and correct copies of the deeds
and other instruments (as recorded) by which any member of the Windset Group
acquired such Real Property, and copies of all title insurance policies,
opinions, abstracts and surveys in the possession of each member of the Windset
Group and relating to the Real Property. With respect to Real Property leased by
any member of the Windset Group (“Leased Real Property”), each
member of the Windset Group has delivered or made available to the Investor
true, complete and correct copies of any leases affecting the Real Property.
Each member of the Windset Group is not a sublessor or grantor under any
sublease or other instrument granting to any other Person any right to the
possession, lease, occupancy or enjoyment of any Leased Real Property. The use
and operation of the Real Property in the conduct of each member of the Windset
Group’s business do not violate in any material respect any Law, covenant,
condition, restriction, easement, license, permit or agreement. No material
improvements constituting a part of the Real Property encroach on real property
owned or leased by a Person other than the members of the Windset Group. There
are no Actions pending nor, to the Corporation’s Knowledge, threatened against
or affecting the Real Property or any portion thereof or interest therein in the
nature or in lieu of condemnation or eminent domain proceedings.

       

      Section
3.13    Condition and Sufficiency of
Assets.  Except as set forth in Schedule 3.13 of the
Disclosure Schedules, the buildings, plants, structures, furniture, fixtures,
machinery, equipment, vehicles and other items of tangible personal property of
the members of the Windset Group are structurally sound, are in good operating
condition and repair, and are adequate for the Business and for the uses to
which they are being put, and none of such buildings, plants, structures,
furniture, fixtures, machinery, equipment, vehicles and other items of tangible
personal property is in need of maintenance or repairs except for ordinary,
routine maintenance and repairs that are not material in nature or cost. The
buildings, plants, structures, furniture, fixtures, machinery, equipment,
vehicles and other items of tangible personal property currently owned or leased
by the members of the Windset Group, together with all other properties and
assets of the members of the Windset Group, are sufficient for the continued
conduct of the Business after the Closing in substantially the same manner as
conducted prior to the Closing, and as presently proposed to be conducted, and
constitute all of the rights, property and assets necessary to conduct the
Business.

       

      Section
3.14    Intellectual Property.

       

      (a)          Schedule
3.14 identifies the Intellectual Property material to the Business, other than
the Software and normal and routine off-the-shelf software licence agreements.
All of such Intellectual Property is valid, subsisting and
enforceable.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (b)          One
or more members of the Windset Group owns, directly and exclusively, all right,
title and interest in and to all Intellectual Property owned by it as identified
in Schedule 3.14, with good and marketable title, free and clear of all
liens, Encumbrances or any other rights of others. Any third party who has any
moral rights or similar rights in or to such Intellectual Property has
irrevocably waived such rights in favour of the Windset Group. One or more
members of the Windset Group hold valid licences for all of the Intellectual
Property owned by third parties.

       

      (c)          No
member of the Windset Group has, during the past three (3) years, except in the
ordinary course of business in connection with the distribution of its products
and licences to end users and in connection with the Canadian Credit
Facilities:

       

      (i)       transferred,
conveyed, sold, assigned, pledged, mortgaged or granted a security interest in
any Intellectual Property owned by any member of the Windset Group to any third
party;

       

      (ii)      entered
into any licence, franchise or other agreement with respect to any Intellectual
Property owned by any member of the Windset Group with any third person;
or

       

      (iii)     otherwise
encumbered any of the Intellectual Property owned by any member of the Windset
Group.

       

      (d)          All
of the Intellectual Property owned by any one or more members of the Windset
Group was created either by Employees in the course of their employment or by
Contractors and all such Employees and Contractors have transferred and assigned
all of their rights in and to such Intellectual Property to the Windset Group
pursuant to written assignment agreements and have waived their moral rights and
rights of a similar nature in and to such Intellectual Property.

       

      (e)          To
the knowledge of the Windset Group, neither the Windset Group nor its operation
of the Business conflicts with, misappropriates or infringes upon, dilutes or
otherwise violates any intellectual property rights of any third
party.

       

      (f)          To
the knowledge of the Windset Group, there is no, and there has not been any,
conflict, unauthorized use, infringement, misappropriation or dilution of any of
the Intellectual Property owned, used or licensed by or to any member of the
Windset Group or any breach at any time of any duty or obligation owed to any
member of the Windset Group in respect of any of the Intellectual
Property.

       

      (g)          No
member of the Windset Group is a party, and the Business is not otherwise
subject, to any agreement, contract or judicial order that in any way limits or
restricts any Intellectual Property that any member of the Windset Group owns
and/or currently uses to conduct the Business, other than normal and routine off
the-shelf software licence agreements.

       

      (h)          Each
employee and contractor to the Windset Group or the Business has signed a
confidentiality and non-disclosure agreement and, except as disclosed in
Schedule 3.14, to the knowledge of the Windset Group there have not been any
breaches of such confidentiality and non-disclosure agreements. To the knowledge
of the Windset Group, the Windset Group’s employment of any of its Employees or
the retainer of any Contractor does not violate any non-disclosure or
non-competition agreement between any Employee or Contractor and a third
party.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      Section
3.15    Accounts
Receivable.  The accounts receivable reflected on the Interim
Balance Sheet and the accounts receivable arising after the date thereof (a)
have arisen from bona fide transactions entered into by each member of the
Windset Group involving the sale of goods or the rendering of services in the
ordinary course of business consistent with past practice; (b) constitute only
valid, undisputed claims of each member of the Windset Group not subject to
claims of set-off or other defenses or counterclaims other than normal cash
discounts accrued in the ordinary course of business consistent with past
practice; and (c) subject to a reserve for bad debts shown on the Interim
Balance Sheet or, with respect to accounts receivable arising after the Interim
Balance Sheet Date, on the accounting records of each member of the Windset
Group, are collectible in full within 90 days after billing. The reserve for bad
debts shown on the Interim Balance Sheet or, with respect to accounts receivable
arising after the Interim Balance Sheet Date, on the accounting records of each
member of the Windset Group have been determined in accordance with GAAP,
consistently applied, subject to normal year-end adjustments and the absence of
disclosures normally made in footnotes.

       

      Section
3.16    Customers and Suppliers.

       

      (a)           Schedule 3.16(a) sets forth a
list of the top ten (10) customers of the Business (each a “Top Ten Customer”) by dollar
value of sales for each of the fiscal years ended December 31, 2008, December
31, 2009 and December 31, 2010.  Except as set out in Schedule
3.16(a), no Top Ten Customer has cancelled or otherwise terminated, or to the
knowledge of the Windset Group threatened to cancel or otherwise terminate, its
relationship with the Windset Group or the Business. No member of the Windset
Group has received any written notice that any Top Ten Customer may cancel or
otherwise materially and adversely modify its relationship with the Windset
Group or the Business or its usage or purchase of the services and products of
the Windset Group and the Business either as a result of the transactions
contemplated hereby or otherwise. No Top Ten Customer is entitled to or
customarily receive discounts, allowances, volume rebate or similar reductions
in price or other trade terms arising from any agreements or understandings
(whether written or oral) with or concessions granted to any Top Ten
Customer.

       

      (b)           Schedule
3.16(b) sets forth a list of the top ten (10) suppliers to the Business (each a
“Top Ten Suppliers”) by
dollar value of sales for each of the fiscal years ended December 31, 2008,
December 31, 2009 and December 31, 2010.  Except as set out in Schedule 3.16(b), no Top Ten
Supplier has cancelled or otherwise terminated, or to the knowledge of the
Windset Group threatened to cancel or otherwise terminate, its relationship with
the Windset Group or the Business. No member of the Windset Group has received
any written notice that any Top Ten Supplier may cancel or otherwise materially
and adversely modify its relationship with the Windset Group or the Business or
cease to supply goods or services to the Windset Group or the Business either as
a result of the transactions contemplated hereby or otherwise. No member of the
Windset Group is entitled to or customarily receive discounts, allowances,
volume rebate or similar reductions in price or other trade terms arising from
any agreements or understandings (whether written or oral) with or concessions
granted by any Top Ten Supplier.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      Section
3.17    Insurance.  Schedule
3.17 of the Disclosure Schedules sets forth a true and complete list of
all current policies or binders of fire, liability, product liability, umbrella
liability, real and personal property, workers’ compensation, vehicular,
directors and officers’ liability, fiduciary liability and other casualty and
property insurance maintained by any member of the Windset Group or a Related
Party relating to the Business, or any assets, operations, Employees,
Contractors, officers and directors related to the same (collectively, the
“Insurance Policies”)
and true and complete copies of such Insurance Policies have been made available
to the Investor. Such Insurance Policies are in full force and effect and shall
remain in full force and effect following the consummation of the transactions
contemplated by this Agreement. No member of the Windset Group nor any Related
Party has received written notice of cancellation of, premium increase with
respect to, or alteration of coverage under, any of such Insurance Policies. All
premiums due on such Insurance Policies have either been paid or, if due and
payable prior to Closing, will be paid prior to Closing in accordance with the
payment terms of each Insurance Policy. The Insurance Policies do not provide
for any retrospective premium adjustment or other experience-based liability on
the part of any member of the Windset Group. All such Insurance Policies (a) are
valid and binding in accordance with their terms; (b) are provided by carriers
who are financially solvent; and (c) have not been subject to any lapse in
coverage. Except as set forth on Schedule 3.17 of the
Disclosure Schedules, there are no claims related to the business of any member
of the Windset Group pending under any such Insurance Policies as to which
coverage has been questioned, denied or disputed or in respect of which there is
an outstanding reservation of rights. Each member of the Windset Group is not in
default under, or has otherwise failed to comply with, in any material respect,
any provision contained in any such Insurance Policy. The Insurance Policies are
of the type and in the amounts customarily carried by Persons conducting a
business similar to any member of the Windset Group and are sufficient for
compliance with all applicable Laws and Contracts to which any member of the
Windset Group is a party or by which it is bound.

       

      Section
3.18    Legal Proceedings; Governmental
Orders.

       

      (a)           Except
as set forth in Schedule
3.18(a) of the Disclosure Schedules, there are no Actions pending or, to
the Corporation’s Knowledge, threatened (a) against or by any member of the
Windset Group affecting any of its properties, assets or customers (or by or
against any Related Party thereof and relating to any member of the Windset
Group); or (b) against or by any member of the Windset Group or any Related
Party that challenges or seeks to prevent, enjoin or otherwise delay the
transactions contemplated by this Agreement. No event has occurred or
circumstances exist that may give rise to, or serve as a basis for, any such
Action.

       

      (b)           Except
as set forth in Schedule
3.18(b) of the Disclosure Schedules, there are no outstanding
Governmental Orders and no unsatisfied judgments, penalties or awards against or
affecting any member of the Windset Group or any of its properties or assets.
Each member of the Windset Group is in compliance with the terms of each
Governmental Order set forth in Schedule 3.18(b) of the Disclosure Schedules. No
event has occurred or circumstances exist that may constitute or result in (with
or without notice or lapse of time) a violation of any such Governmental
Order.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      Section
3.19    Compliance With Laws; Permits.

       

      (a)           Except
as set forth in Schedule
3.19(a) of the Disclosure Schedules, each member of the Windset Group has
complied, and is now complying, with all Laws applicable to it or the Business,
and to its properties or assets.

       

      (b)           All
Permits required for any member of the Windset Group to conduct the Business
have been obtained by it and are valid and in full force and effect. All fees
and charges with respect to such Permits as of the date hereof have been paid in
full. Schedule 3.19(b)
of the Disclosure Schedules lists all current Permits issued to any
member of the Windset Group, including the names of the Permits and their
respective dates of issuance and expiration. No event has occurred that, with or
without notice or lapse of time or both, would reasonably be expected to result
in the revocation, suspension, lapse or limitation of any Permit set forth in
Schedule 3.19(b) of the Disclosure Schedules.

       

      Section
3.20    Environmental Matters.

       

      (a)           The
Windset Group is and has been in compliance in all material respects with all
Environmental Laws.  There has been no release of any Hazardous
Material on, upon, into or from any site owned, leased or otherwise used by the
Windset Group during the pendency of such ownership, lease or
use.  There have been no Hazardous Materials generated by the Windset
Group that have been disposed of or come to rest at any site that has been
included in any published U.S. federal, state or local “superfund” site list or
any other similar list of hazardous or toxic waste sites published by any
governmental authority in the United States.  There are no underground
storage tanks located on, no polychlorinated biphenyls (“PCBs”) or PCB-containing
equipment used or stored on, and no hazardous waste as defined by the Resource
Conservation and Recovery Act, as amended, stored on, any site owned or operated
by the Windset Group or contemplated to be owned or operated in connection with
the Business, except for the storage of hazardous waste in compliance with
Environmental Laws and as listed on Schedule
3.20(a).  Each member of the Windset Group reasonably believes
that no material expenditures are or will be required to comply with
Environmental Laws associated with the Business.  Each member of the
Windset Group has made available to the Investor true and complete copies of all
material environmental records, reports, notifications, certificates of need,
permits, pending permit applications, correspondence, engineering studies, and
environmental studies or assessments.  For purposes of this Section 3.20, “Environmental Laws” means any
law, regulation, or other applicable requirement relating to (a) releases or
threatened release of Hazardous Materials; (b) pollution or protection of
employee health or safety, public health or the environment; or (c) the
manufacture, handling, transport, use, treatment, storage, or disposal of
Hazardous Materials.

       

      (b)           Schedule 3.20(b) contains a
complete and accurate list of all current Environmental Permits issued to
members of the Windset Group or any past or present Environmental Permits issued
to members of the Windset Group which are related to the Business, the Real
Property or the U.S. Facility.  All such Environmental Permits are
valid and in good standing, are complete and accurate in all material respects.
There has been no violation of any such Environmental Permits, program approvals
or other approvals by a member of the Windset Group and no proceeding is
pending, or to the knowledge of the Windset Group, threatened to revoke, modify,
cancel, suspend or limit any such Environmental Permits, program approvals or
other approvals or to add any conditions of compliance. The Windset Group is in
possession of all Environmental Permits which are required of it or for the use
and occupation of the U.S. Facility, the Owned Real Estate and the Leased
Premises for the operation of the Business under all applicable
Laws.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (c)           Except
as disclosed in Schedule
3.20(c), all operations of the Leased Premises and the Owned Real
Property, while occupied by any member of the Windset Group and, to the
knowledge of the Windset Group, while occupied by any of their respective
predecessors in title, have been and are now in compliance with all
Environmental Laws. The Windset Group has filed all reports and other
information and obtained all Environmental Permits to enable the Business as now
conducted to be carried on in compliance with Environmental Laws.

       

      (d)           No
remedial orders have been issued to or received by any member of the Windset
Group, a Related Party, or in respect of the Business, the Owned Real Property,
the Leased Premises or the U.S. Facility.

       

      (e)           During
the Windset Group’s occupation of the Owned Real Property, the Leased Premises
and the U.S. Facility, and to the knowledge of the Windset Group, there has not
been a Release of Hazardous Material on any of such premises in violation of
Environmental Laws, and there has not been a Release of or exposure to Hazardous
Material at any property or facility at any time as would reasonably be expected
to give rise to any current or future liabilities of the Windset Group under any
Environmental Laws.

       

      (f)          
No member of the Windset Group or any Related Party has received any written
notice, report or other information of any alleged violation of or liabilities
under any Environmental Laws or other damage to the environment emanating from
or occurring on the Owned Real Property, the Leased Premises or the U.S.
Facility and, to the knowledge of the Windset Group, no fact or circumstances
exists which would give rise to an Environmental Claim.

       

      (g)           There
are no active or abandoned above ground or, to the knowledge of the Corporation,
underground storage tanks at, on, in or under the U.S. Facility, the Owned Real
Property or the Leased Premises. None of the Owned Real Property, the Leased
Premises or the U.S. Facility have been used to generate, manufacture, refine,
treat, transport, store, handle, dispose, transfer, use, produce or process
Hazardous Materials, except in compliance with all applicable Environmental
Laws. None of the Owned Real Property, the Leased Premises or the U.S. Facility
have been used for or been designated as a waste disposal site.  No
PCBs or equipment containing PCBs; lead or lead based paint; asbestos or
asbestos-containing materials are present at any of the Owned Real Property, the
Leased Premises or the U.S. Facility. To the knowledge of the Corporation, no
toxic mould, mildew or fungi are present at any of the Owned Real Property, the
Leased Premises or the U.S. Facility the presence of which would have a material
impact on the operations of the Business.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (h)           Except
as provided for in Schedule
3.20(h), no member of the Windset Group nor any Related Party has
assumed, undertaken, provided an indemnity with respect to, or otherwise become
subject to, any liability of any other Person relating to Environmental
Laws.

       

      (i)           
The Corporation has made available to the Investor copies of all documents,
records and information in the possession or control of, or available to any
member of the Windset Group concerning any environmental or health and safety
matter relevant to any member of the Windset Group, the U.S. Facility, the Owned
Real Property, the Leased Premises, any past properties, facilities or
operations of any member of the Windset Group, or the Business, including
documentation regarding waste disposal, reports, correspondence, Environmental
Permits related to environmental or health and safety matters issued by any
Governmental Authority, and analyses and monitoring data for soil, groundwater
and surface water and all material third party reports pertaining to any
environmental assessments or audits that were obtained by, or are in the
possession or control of, any member of the Windset Group.

       

      Section
3.21    Pension and Benefit Plans.

       

      (a)           Schedule 3.21 contains a
complete and accurate list of all Plans. No such Plan has been terminated or
partially terminated and all such Plans are still in full force and effect. All
Plan Documents have been made available to the Investor and are true, correct,
complete in all material respects and, where applicable,
up-to-date.  No member of the Windset Group has any liabilities or
contingent liabilities in respect of any pension, benefit or compensation Plan
that has been discontinued.

       

      (b)           All
Plans are registered where required by the applicable Laws and no events have
occurred which would affect the registered status of such Plans.

       

      (c)           All
contributions and premiums required to be paid to all statutory plans which each
member of the Windset Group is required to comply with, including the Canada or
Quebec pension Plan and Plans administered pursuant to applicable provincial
health tax, workers compensation and employment insurance Laws, have been paid
by each member of the Windset Group in accordance with applicable
Law.

       

      (d)           All
Plans are in good standing under applicable Laws and each member of the Windset
Group has made all filings required by the Governmental Authorities and
applicable Laws. The Plans and all investments held by such Plans comply in all
respects with all applicable Laws and the Plan Documents and the Plans have been
established, funded, invested, amended, maintained and administered in
compliance with all of the terms and conditions of the Plans and all applicable
Laws.

       

      (e)           There
have been no withdrawals or transfers of assets from the Plans except to a
member or a beneficiary in accordance with the Plan Documents or in accordance
with approval granted by a Governmental Authority. No actuarial surplus has ever
been removed from any of the Plans. In respect of each Plan that is funded, in
whole or in part, no Person has taken any contribution holidays in respect of
such Plan, paid any administration expenses from the fund of such Plan or
received a transfer from or been merged with another plan, in each case except
in accordance with the terms of such Plan, the trusts and other funding criteria
which govern such Plan and applicable Law.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (f)           No
unfunded liability, solvency deficiency, unpaid special payment or experience
deficiency, whether due or not, exists with respect to the Plans. There has been
no material change in the value of any Plan since the last valuation which would
affect the actuarial report or financial statements and the actuarial methods
and assumptions used have not changed since the last valuation.

       

      (g)           None
of the execution and delivery of this Agreement, the performance of the
Corporation’s obligations under this Agreement or the consummation of any of the
transactions contemplated in this Agreement will:

       

      (i)       result
in any payment (including bonus, golden parachute, retirement, severance,
unemployment compensation, or other benefit or enhanced benefit) becoming
payable under any Plan;

       

      (ii)      increase
any benefits otherwise payable under any Plan;

       

      (iii)     entitle
any Employee or any Contractor to any job security or similar benefit or any
enhanced benefits; or

       

      (iv)     result
in the acceleration of the time of payment or vesting of any benefits otherwise
payable under any Plan, or result in any such plan becoming terminable other
than at the sole and unfettered discretion of the Windset Group.

       

      (h)           None
of the Plans (other than any pension plans) provide benefits beyond retirement
or other termination of service to Employees or former Employees or to the
beneficiaries or dependants of such Employees.

       

      (i)         
  No Plan is a multi-employer pension plan as defined under the
provisions of applicable federal or provincial pension standards
legislation.

       

      (j)       
    No condition exists that would prevent a member of the
Windset Group from amending or terminating any Plan other than any limitations
imposed by applicable Law.

       

      (k)           No
member of the Windset Group has any liabilities on account of being deemed, at
any relevant time, a single employer with any other Person under or pursuant to
Section 414(b), (c), (m) or (o) of the U.S. Internal Revenue Code of 1986, as
amended.

       

      Section
3.22    Employment Matters

       

      (a)           Schedule 3.22 contains a
complete and accurate list of all Employees, their respective positions, dates
of hire, current salaries, benefits and other remunerations and dates of last
salary increases and indicates which Employees are parties to a written or oral
agreement with a member of the Windset Group (including confidentiality and
non-competition agreements). Except as disclosed in Schedule 3.22, no Person is a
party to any agreement with past or present Employees, agents or Contractors in
connection with the Business. All written employment contracts with Employees or
Contractors are described in Schedule 3.22 and
complete and accurate copies of such employment contracts have been made
available to the Investor.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (b)           No
trade union, employee association or other similar entity has any bargaining
rights acquired by either certification or voluntary recognition with respect to
the Employees or Contractors except as set out in Schedule 3.22. To the
knowledge of the Windset Group, there are no current attempts to organize or
establish any labour union, employee association or other similar entity
affecting the Windset Group or the Business. To the knowledge of the Windset
Group, there are no threatened or apparent union organizing activities involving
the Employees or Contractors.

       

      (c)           None
of the Windset Group or any Related Party is or has ever been delinquent in
payments to any Employee, consultant or Contractor for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed for
it or amounts required to be reimbursed to such Person. None of the Windset
Group or any Related Party is or has ever been liable for any payment to any
Person, trust or other fund, or to any Governmental Authority, with respect to
unemployment compensation benefits, social security or other benefits or
obligations for Employees or Contractors (other than routine payments to be made
in the ordinary course of business and consistent with past
practice).

       

      (d)           With
respect to the transactions contemplated by this Agreement and the other
Transaction Documents, any notice required under any law or collective
bargaining agreement has been or prior to Closing will be given, and all
bargaining obligations with any employee representative have been or prior to
Closing will be satisfied. Within the past three (3) years, the Business has not
implemented any plant closing or layoff of Employees or Contractors that could
implicate the Worker
Adjustment and Retraining Notification Act of 1988, as amended, or any
similar foreign, state or local Law, regulation or ordinance.

       

      Section
3.23    Taxes.  Except as
set forth in Schedule
3.23 of the Disclosure Schedules:

       

      (a)           All
Tax Returns required to be filed on or before the Closing Date by each member of
the Windset Group have been, or will be, timely filed. Such Tax Returns are, or
will be, true, complete and correct in all respects. All Taxes due and owing by
each member of the Windset Group (whether or not shown on any Tax Return) have
been, or will be, timely paid.

       

      (b)           Each
member of the Windset Group and each Related Party has withheld and paid each
Tax required to have been withheld and paid in connection with amounts paid or
owing to any Employee, Contractor, creditor, customer, shareholder or other
party, and complied with all information reporting and backup withholding
provisions of applicable Law.

       

      (c)           No
claim has been made by any Taxing Authority in any jurisdiction where any member
of the Windset Group does not file Tax Returns that it is, or may be, subject to
Tax by that jurisdiction.

       

      (d)           There
are no outstanding agreements, waivers, or arrangements or requests for such
agreements, waivers or arrangements extending the statutory period of
limitations applicable to any claim for, or period of collection or assessment
of, Taxes of or with respect to any member of the Windset
Group.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (e)           There
are no liens for Taxes (other than for current Taxes not yet due and payable) on
any member of the Windset Group relating to the Real Property.

       

      (f)          
The amount of the Windset Group’s Liability for unpaid Taxes for all periods
ending on or before September 25, 2010 does not, in the aggregate, exceed the
amount of accruals for Taxes (excluding reserves for deferred Taxes) reflected
on the Financial Statements. The amount of the Windset Group’s Liability for
unpaid Taxes for all periods following the end of the recent period covered by
the Financial Statements shall not, in the aggregate, exceed the amount of
accruals for Taxes (excluding reserves for deferred Taxes) as adjusted for the
passage of time in accordance with the past custom and practice of the Windset
Group (and which accruals shall not exceed comparable amounts incurred in
similar periods in prior years).

       

      (g)           No
deficiencies for any Taxes have been proposed, asserted or assessed in writing
against any member of the Windset Group that are still pending.

       

      (h)           There
are no outstanding agreements, waivers, or arrangements or requests for such
agreements, waivers or arrangements extending the statutory period of
limitations applicable to any claim for, or period of collection or assessment
of, Taxes of or with respect to any member of the Windset Group.

       

      (i)      
     No written notice has been received by any member
of the Windset Group (i) that any Tax Return of such is under current
examination by the United States Internal Revenue Service or by any state, local
or foreign Tax Authority or (ii) that any such examination is threatened or
contemplated.

       

      (j)     
      No member of the Windset Group has (A) been
the subject of an audit or other examination of Taxes by a Tax Authority, or (B)
received any notices from any Tax Authority relating to any issue which could
affect the Tax liability of any member of the Windset Group.

       

      (k)           No
member of the Windset Group as of the Closing Date, (A) is presently contesting
the Tax liability of any member of the Windset Group before any court, tribunal
or agency, (B) has granted a power-of-attorney relating to Tax matters to any
person or (C) has applied for and/or received a ruling or determination from a
Tax Authority regarding a past or prospective transaction of any member of the
Windset Group.

       

      (l)      
     All Tax Returns filed by each member of the
Windset Group have been and are true, correct and complete in all material
respects. No such Tax Return contains any misstatement or omits any statement
that should have been included therein.  No such Tax Return has been
amended.

       

      (m)          The
Tax Liability of the Windset Group for previous taxation periods is as indicated
in its Tax Returns. All Taxes shown as due on such Tax Returns or otherwise due
or claimed to be due by any Governmental Authority have been paid. All
instalments, assessments and reassessments of which the Windset Group is aware
or has received notice and all other Taxes which are due and payable, have been
paid in full. Reserves and provisions for Taxes accrued but not yet due on or
before the Closing Date as reflected in the Financial Statements are adequate as
of the date of the Financial Statements and are in accordance with GAAP. No
deficiencies for Taxes have been proposed, asserted or assessed against any
member of the Windset Group that are not adequately reserved against. Since
December 31, 2009, no material Tax liability of a member of the Corporation and
its Subsidiaries has been assessed, proposed to be assessed, incurred or accrued
other than in the ordinary course of business.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (n)           The
Windset Group has made available to the Investor complete and correct copies of
all Tax Returns that have been filed as of the date hereof (except Tax Returns
for periods in respect of which the applicable statutory period of limitations
has expired) and copies of all its correspondence with taxing authorities in
respect of the periods to which such Tax Returns relate.

       

      (o)           No
unresolved assessments, reassessments, audits, claims, actions, suits,
proceedings or investigations exist or have been initiated with regard to any
Taxes or Tax Returns of any member of the Windset Group. To the knowledge of the
Corporation, no assessment, reassessment, audit or investigation by any
Governmental Authority is underway, threatened or imminent with respect to Taxes
for which any member of the Windset Group may be liable, in whole or
part.

       

      (p)           Other
than as described in Schedule
3.23, no member of the Windset Group has requested or entered into any
agreement or other arrangement or executed any waiver providing for any
extension of time within which (i) to file any Tax Return in respect of any
Taxes for which any member of the Windset Group is or may be liable; (ii) to
file any elections, designations or similar filings relating to Taxes for which
any member of the Windset Group is or may be liable; (iii) any member of the
Windset Group is required to pay or remit any Taxes or amounts on account of
Taxes; or (iv) any Governmental Authority may assess or collect Taxes for which
any member of the Windset Group is or may be liable.

       

      (q)           All
liabilities of the Windset Group and each of its members in respect of Taxes
have been assessed by the relevant Governmental Authority and notices of
assessment have been issued for all taxation periods ending on or before
December 31, 2009.

       

      (r)           Each
member of the Windset Group have duly and on a timely basis withheld from any
amount paid or credited by it to or for the account or benefit of any
Person,  including any Employees, Contractors, officers or directors
and any non-resident person, the amount of all Taxes and other deductions
required by any Law, rule or regulation to be withheld from any such amount and
has duly and on a timely basis remitted the same to the appropriate Governmental
Authority.

       

      (s)           Except
as set forth in Schedule
3.23, no member of the Windset Group has, directly or indirectly,
transferred property to or supplied services to, or acquired property or
services from, any Person with whom it was not dealing at arm’s length (for the
purposes of the Tax Act) for consideration other than consideration equal to the
fair market value of the property or services at the time of the transfer,
supply, acquisition or disposition of such property or services.

       

      (t)          
Except as set forth in Schedule
3.23, for all transactions between any member of the Windset Group that
is resident in Canada for the purposes of the Tax Act and any non-resident
Person with whom the Corporation or any such Subsidiary was not dealing at arm’s
length during a taxation year ending on or before the Closing Date, each member
of the Windset Group has made or obtained records or documents that meet the
requirements of paragraphs 247(4)(a) to (c) of the Tax Act.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (u)          Except
as set forth in Schedule
3.23(u), no member of the Windset Group has entered into any advance
pricing agreement with any Governmental Authority.

       

      (v)          There
are no circumstances which exist and would result in, or which have existed and
resulted in, the application to any member of the Windset Group of any of
sections 78, 79, 79.1, 80, 80.01, 80.02, 80.03 or 80.04 of the Tax Act, or any
equivalent provision of the taxation legislation of any province or any other
jurisdiction, to the Windset Group at any time up to and including the Closing
Date in respect of any transaction entered into. No member of the Windset Group
has claimed, nor will it claim for any return for a period ending on or prior to
the Closing Date, any reserve under any one or more of subparagraph
40(1)(a)(iii), paragraphs 20(1)(m) or 20(1)(n) of the Tax Act or any equivalent
provincial provision, if such amount could be included in the income of such
entity for any period ending after the Closing Date.

       

      (w)         There
are no Encumbrances for Taxes on the assets of any member of the Windset Group
other than Permitted Encumbrances.

       

      (x)         
No member of the Windset Group is party to, bound by or obligated under any Tax
Sharing agreement, tax indemnification agreement or similar contract or
arrangement. No member of the Windset Group has any liability for the Taxes of
any other Person.

       

      (y)          Each
member of the Windset Group listed in Schedule 3.23(s) is a
registrant for the purposes of the HST/GST Legislation having the registration
numbers listed in Schedule 3.23(s). No member of the Windset Group is or has
ever been a financial institution within the meaning of the HST/GST
Legislation.

       

      (z)           No
member of the Windset Group is required to file any Tax Returns in any
jurisdiction outside Canada and the United States.

       

      (aa)        No
member of the Windset Group has made an election under Section 301.7701-3 of the
United States Treasury Regulations to be treated as an entity that is not an
association taxable as a corporation for United States federal tax
purposes.

       

      (bb)       Schedule 3.23(bb) of the
Disclosure Schedules sets forth:

       

      (i)           the
taxable years of the Windset Group as to which the applicable statutes of
limitations on the assessment and collection of Taxes have not
expired;

       

      (ii)          those
years for which examinations by the taxing authorities have been completed;
and

       

      (iii)         those
taxable years for which examinations by taxing authorities are presently being
conducted.

       

      (cc)        Except
as disclosed in Schedule
3.23(cc) of the Disclosure Schedules, no elections have been made by a
member of the Windset Group under 83 and 85 of the Tax Act.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (dd)       All
deficiencies asserted, or assessments made, against any member of the Windset
Group as a result of any examinations by any taxing authority have been fully
paid.

       

      (ee)       
The Windset Group is not a party to any Action by any taxing authority. There
are no pending or threatened Actions by any taxing authority.

       

      (ff)         The
Windset Group has delivered to the Investor copies of all federal, state, local
and foreign income, franchise and similar Tax Returns, examination reports, and
statements of deficiencies assessed against, or agreed to by, any member of the
Windset Group for all Tax periods ending after December 31, 2008.

       

      (gg)       There
are no Encumbrances for Taxes (other than for current Taxes not yet due and
payable) upon the assets of any member of the Windset Group.

       

      (hh)       No
member of the Windset Group is a party to, or bound by, any Tax indemnity,
Tax-sharing or Tax allocation agreement.

       

      (ii)          No
member of the Windset Group is a party to, or bound by, any closing agreement or
offer in compromise with any taxing authority.

       

      (jj)          No
private letter rulings, technical advice memoranda or similar agreement or
rulings have been requested, entered into or issued by any taxing authority with
respect to any member of the Windset Group.

       

      (kk)        The
Windset Group has not been a member of an affiliated, combined, consolidated or
unitary Tax group for Tax purposes. The Windset Group has no Liability for Taxes
of any Person (other than the Corporation) under Treasury Regulations Section
1.1502-6 (or any corresponding provision of state, local or foreign Law), as
transferee or successor, by contract or otherwise.

       

      (ll)          No
member of the Windset Group has  agreed to make, nor is it required to
make, any adjustment under Sections 481(a) or 263A of the Code or any comparable
provision of state, local or foreign Tax Laws by reason of a change in
accounting method or otherwise.

       

      (mm)      No
member of the Windset Group has been, or will be immediately following the
Closing, a “distributing corporation” or a “controlled corporation” in
connection with a distribution described in Section 355 of the
Code.

       

      (nn)       No
member of the Windset Group has entered into any “listed transaction,” as
defined in Treasury Regulation Section 1.6011-4(b)(2).

       

      (oo)       No
member of the Windset Group has been, a party to, or a promoter of, a
“reportable transaction” within the meaning of Section 6707A(c)(1) of the Code
and Treasury Regulations Section 1.6011-4(b).

       

      (pp)       Except
as disclosed in Schedule
3.23(pp), there is currently no limitation on the utilization of net
operating losses, capital losses, built-in losses, tax credits or similar items
of any member of the Windset Group under Sections 269, 382, 383, 384 or 1502 of
the Code and the Treasury Regulations thereunder (and comparable provisions of
state, local or foreign Law).


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (qq)       Schedule 3.23(jj) of the
Disclosure Schedules sets forth all foreign jurisdictions in which each member
of the Windset Group is subject to Tax, is engaged in business or has a
permanent establishment. The Windset Group has not entered into a gain
recognition agreement pursuant to Treasury Regulations Section 1.367(a)-8. The
Windset Group has not transferred an intangible the transfer of which would be
subject to the rules of Section 367(d) of the Code.

       

      (rr)        
None of the assets of any member of the Windset Group is property that the
member of the Windset Group is required to treat as being owned by any other
person pursuant to the so-called “safe harbor lease” provisions of former
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended.

       

      (ss)        Other
than Windset Holdings USA, Inc., Windset Farms (California), Inc. and Windset
Greenhouses (Nevada), Inc., each member of the Windset Group has been, since
incorporation, a Canadian-controlled private corporation under the provisions of
the Tax Act.

       

      (tt)        
Each member of the Windset Group has maintained and continues to maintain at its
place of business in Canada, all books and records required to be maintained
under the Tax Act, the Excise Tax Act (Canada) and any comparable law of any
province or territory in Canada, including laws related to sales and use
taxes.

       

      (uu)       No
member of the Windset Group currently is, nor has at any time in the current
taxable year been, nor will become as a result of the transactions contemplated
herein: a “controlled foreign corporation” (“CFC”) or a “passive foreign
investment company” (“PFIC”), in each case as
defined in the Code.  No member of the Windset Group anticipates that it
will become a CFC or PFIC for the current taxable year.  The Corporation
and each other member of the Windset Group is treated as a corporation for U.S.
federal income tax purposes, and no member of the Windset Group is a “surrogate
foreign corporation” under either Section 7874(a)(2)(B) or 7874(b) of the
Code.

       

      (vv)      
Except as disclosed in Schedule
3.23(vv), there are no elections in respect to distributions or transfers
that are required to be made by any member of the Windset Group that have not
already been made.

       

      (ww)      Since
2003, no member of the Windset Group has received a taxable dividend described
in subsection 55(2) of the Tax Act (including a taxable dividend where
subsection 55(3) of the Tax Act was applicable.

       

      Section
3.24    Books and
Records.  The minute books and stock record books of the
Corporation, all of which have been delivered to the Investor, are complete and
correct in all material respects and have been maintained in accordance with
sound business practices. The minute books of the Corporation contain accurate
and complete records of all meetings, and actions taken by written consent of,
the shareholders, the board of directors and any committees of the board of
directors of the Corporation, and no meeting, or action taken by written
consent, of any such shareholders, board of directors or committee has been held
for which minutes have not been prepared and are not contained in such minute
books. At the Closing, all such books and records will be in the possession of
the Corporation or advisors to the Corporation known to the
Investor.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      Section
3.25    Brokers.  Except as
set forth in Schedule
3.25 of the Disclosure Schedules, no broker, finder or investment banker
is entitled to any brokerage, finder’s or other fee or commission in connection
with the transactions contemplated by this Agreement or any other Transaction
Document based upon arrangements made by or on behalf of the
Corporation.

       

      Section
3.26    Licenses and
Permits.  Each member of the Windset Group holds all
Authorizations necessary to own or lease its properties and to conduct its
business as presently conducted.  Schedule 3.26 sets forth a
list of all Authorizations which are material to the Business, except as
otherwise disclosed in the Disclosure Schedules.  Each member of the
Windset Group is in compliance with all Authorizations except where
noncompliance would not have a Material Adverse Effect.  To the
knowledge of the Corporation, no Governmental Authority has threatened the
suspension or cancellation of any Authorization.

       

      Section
3.27    Accounting
Practices.  The Windset Group makes and keeps accurate books
and records reflecting its assets and maintains internal accounting controls
that provide reasonable assurance that (i) transactions are executed with
management’s authorization, (ii) transactions are recorded as necessary to
permit preparation of the Windset Group’s financial statements and to maintain
accountability for the assets of each the Windset Group, (iii) access to the
assets of the Windset Group is permitted only in accordance with management’s
authorization and (iv) the reported accountability of the assets of the Windset
Group is compared with existing assets at reasonable intervals.

       

      Section
3.28    Compliance With Export and Trade
Laws.  To the knowledge of the Corporation, each member of the
Windset Group is in material compliance with all applicable United States and
foreign government laws and regulations concerning the exportation of any
products, technology, technical data and services, including those administered
by, without limitation, the United States Department of Commerce, the United
States Department of State, and the United States Department of the
Treasury.  To the knowledge of the Windset Group, each member of the
Windset Group is also in material compliance with United States and
international economic and trade sanctions, including those administered by the
Office of Foreign Assets Control within the United States Department of the
Treasury.  To the knowledge of the Corporation, each member of the
Windset Group is also in material compliance with the antiboycott regulations
administered by the United States Department of Commerce, the Foreign Corrupt
Practices Act, and all laws and regulations administered by the Bureau of
Customs and Border Protection in the United States Department of Homeland
Security.

       

      Section
3.29    Privacy.  Each
member of the Windset Group has complied with all privacy laws, including the
Privacy Act (British
Columbia) in connection with the collection, use and disclosure of all personal
information.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Section
3.30    Full
Disclosure.  The Windset Group has made available to the
Investor all the information available to the Windset Group that the Windset
Group has the lawful right to provide, and that the Windset Group reasonably
believes that Investor would need for deciding whether to acquire the Purchased
Shares or to proceed with the projects contemplated by the MOU.  No
member of the Windset Group has wilfully, knowingly or recklessly made any
untrue statement of a material fact, nor omitted to state a material fact
necessary, in order to make the statements contained in this Agreement, the
Transaction Agreements, nor any other documents delivered, or caused to be
delivered, by the Corporation herewith or therewith untrue.  No
representation or warranty by any member of the Windset Group in this Agreement
and no statement contained in the Disclosure Schedules to this Agreement or any
certificate or other document furnished or to be furnished to the Investor
pursuant to this Agreement contains any untrue statement of a material fact, or
omits to state a material fact necessary to make the statements contained
therein, in light of the circumstances in which they are made, not
misleading.

       

      ARTICLE
IV    Representations and warranties of the Investor

       

      Except as
set forth in the correspondingly numbered Section of the Disclosure Schedules,
the Investor represents and warrants to the Corporation that the statements
contained in this Article
IV are true and correct as of the date hereof.

       

      Section
4.01    Organization and Authority of the
Investor.  The Investor is a corporation duly organized,
validly existing and in good standing under the Laws of the state of
Delaware.  The Investor has full corporate power and authority to
enter into this Agreement and the other Transaction Documents to which the
Investor is a party, to carry out its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery by the Investor of this Agreement and any other Transaction
Document to which the Investor is a party, the performance by the Investor of
its obligations hereunder and thereunder and the consummation by the Investor of
the transactions contemplated hereby and thereby have been duly authorized by
all requisite corporate action on the part of the Investor. This Agreement has
been duly executed and delivered by the Investor, and (assuming due
authorization, execution and delivery by the Corporation) this Agreement
constitutes a legal, valid and binding obligation of the Investor enforceable
against the Investor in accordance with its terms. When each other Transaction
Document to which the Investor is or will be a party has been duly executed and
delivered by the Investor (assuming due authorization, execution and delivery by
each other party thereto), such Transaction Document will constitute a legal and
binding obligation of the Investor enforceable against it in accordance with its
terms.

       

      Section
4.02    No Conflicts.  The
execution, delivery and performance by the Investor of this Agreement and the
other Transaction Documents to which it is a party, and the consummation of the
transactions contemplated hereby and thereby, do not and will not conflict with
or result in a violation or breach of, or default under, any provision of the
certificate of incorporation, by-laws or other organizational documents of the
Investor.

       

      Section
4.03    Sufficiency of
Funds.  the Investor has sufficient cash on hand or other
sources of immediately available funds to enable it to make payment of the
Purchase Price and consummate the transactions contemplated by this
Agreement.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      ARTICLE
V    Covenants

       

      Section
5.01    No Solicitation of Other
Bids.

       

      (a)           The
Corporation agrees that, through the earlier of (i) February 15, 2011 and (ii)
the date on which the Investor notifies the Corporation, in writing, of its
intention not to continue to pursue the proposed transaction (the “No-Shop Period”), neither the
Corporation nor any Affiliate, director, officer, employee, shareholder or agent
of the Corporation will, directly or indirectly, solicit, initiate, entertain or
encourage any proposals or offers from any third party relating to the
transactions contemplated by this Agreement, or participate in any discussions
regarding, or furnish to any person any information with respect to, any such
transaction.

       

      (b)           The
Corporation will promptly inform the Investor in writing of any third party
inquiries or proposals received by the Corporation during the No-Shop
Period.

       

      (c)           The
covenants in this section will expire in the event that Closing Date has not
occurred on or by February 15, 2011.

       

      Section
5.02    Confidentiality.  Following
the Closing Date, the Corporation shall, and shall cause members of the Windset
Group and the Related Parties to, hold, and shall use its reasonable best
efforts to cause its or their respective Representatives to hold, in confidence
any and all information, whether written or oral, concerning this Agreement and
the Transaction Agreements, except to the extent that the Corporation can show
that such information (a) is generally available to and known by the public
through no fault of the Windset Group, a Related Party, or their respective
Representatives; or (b) is lawfully acquired by the Windset Group, a Related
Party or their respective Representatives from and after the Closing Date from
sources which are not prohibited from disclosing such information by a legal,
contractual or fiduciary obligation. If the Windset Group, a Related Party or
their respective Representatives are compelled to disclose any information by
judicial or administrative process or by other requirements of Law, the
Corporation shall promptly notify the Investor in writing and shall disclose
only that portion of such information which the Corporation is advised by its
counsel in writing is legally required to be disclosed, provided that the Corporation
shall use reasonable best efforts to obtain an appropriate protective order or
other reasonable assurance that confidential treatment will be accorded such
information.

       

      Section
5.03    Non-competition;
Non-solicitation.

       

      (a)           For
a period of six (6) years commencing on the Closing Date (the “Restricted Period”), each
Party shall not, and shall not permit any of its Affiliates to, directly or
indirectly, except as expressly contemplated by the MOU, (i) engage in or assist
others in engaging in the Restricted Business in the Territory; (ii) have an
interest in any Person that engages directly or indirectly in the Restricted
Business in the Territory in any capacity, including as a partner, shareholder,
member, employee, principal, agent, trustee or consultant; or (iii)
intentionally interfere in any material respect with the business relationships
(whether formed prior to or after the date of this Agreement) between the
Windset Group and customers or suppliers of the Windset Group. Notwithstanding
the foregoing, Affiliates of the Corporation may own, directly or indirectly,
solely as an investment, securities of any Person traded on any national
securities exchange if such affiliate is not a controlling Person of, or a
member of a group which controls, such Person and does not, directly or
indirectly, own 5% or more of any class of securities of such
Person.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (b)           For
a period of three (3) years commencing on the Closing Date (the “Non- Solicitation Period”),
each Party shall not, and shall not permit any of its Affiliates to, directly or
indirectly, hire or solicit any employee of the Windset Group or the Investor,
as applicable, or encourage any such employee to leave such employment or hire
any such employee who has left such employment, except pursuant to a general
solicitation which is not directed specifically to any such employees; provided, that nothing in
this Section 5.03(b)
shall prevent the Windset Group, the Investor or any of its respective
Affiliates from hiring (i) any employee whose employment has been terminated by
the Windset Group or the Investor, as applicable, or (ii) after 180 days
from the date of termination of employment, any employee whose employment has
been terminated by the employee.

       

      (c)           During
the Non-Solicitation Period, each Party shall not, and shall not permit any of
its Affiliates to, directly or indirectly, solicit or entice, or attempt to
solicit or entice, any clients or customers of the Windset Group or potential
clients or customers of the Windset Group for purposes of diverting their
business or services from the Windset Group.

       

      (d)           Each
Party acknowledges that the restrictions contained in this Section 5.03 are reasonable
and necessary to protect the legitimate interests of the Investor and the
Corporation and constitute a material inducement to the Parties to enter into
this Agreement and consummate the transactions contemplated by this Agreement.
In the event that any covenant contained in this Section 5.03 should ever be
adjudicated to exceed the time, geographic, product or service, or other
limitations permitted by applicable Law in any jurisdiction, then any court is
expressly empowered to reform such covenant, and such covenant shall be deemed
reformed, in such jurisdiction to the maximum time, geographic, product or
service, or other limitations permitted by applicable Law. The covenants
contained in this Section
5.03 and each provision hereof are severable and distinct covenants and
provisions. The invalidity or unenforceability of any such covenant or provision
as written shall not invalidate or render unenforceable the remaining covenants
or provisions hereof, and any such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such covenant or
provision in any other jurisdiction.

       

      Section
5.04    Closing
Conditions  From the date hereof until the Closing, each Party
hereto shall use reasonable best efforts to take such actions as are necessary
to expeditiously satisfy the closing conditions set forth in Article VI
hereof.

       

      Section
5.05    Public
Announcements.  Unless otherwise required by applicable Law or
stock exchange requirements (based upon the reasonable advice of counsel), no
party to this Agreement or their Affiliates shall make any public announcements
in respect of this Agreement or the transactions contemplated hereby or
otherwise communicate with any news media without the prior consent of the other
party (which consent shall not be unreasonably withheld or delayed), and the
Parties shall cooperate as to the timing and contents of any such
announcement.

       

      Section
5.06   Further
Assurances.  Following the Closing, each of the Parties hereto
shall, and shall cause their respective Affiliates to, execute and deliver such
additional documents, instruments, conveyances and assurances and take such
further actions as may be reasonably required to carry out the provisions hereof
and give effect to the transactions contemplated by this
Agreement.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      ARTICLE
VI          Conditions to
closing

       

      Section
6.01    Conditions to Obligations of All
Parties.  The obligations of each party to consummate the
transactions contemplated by this Agreement shall be subject to the fulfilment,
at or prior to the Closing, of each of the following conditions:

       

      (a)          No
Governmental Authority shall have enacted, issued, promulgated, enforced or
entered any Governmental Order which is in effect and has the effect of making
the transactions contemplated by this Agreement illegal, otherwise restraining
or prohibiting consummation of such transactions or causing any of the
transactions contemplated hereunder to be rescinded following completion
thereof.

       

      (b)          Each
member of the Windset Group shall have received all consents, Authorizations,
orders and approvals from the Governmental Authorities referred to in Schedule 3.04 of the
Disclosure Schedule and the Investor shall have received all consents,
Authorizations, orders and approvals from the Governmental Authorities necessary
to consummate the transactions contemplated by this Agreement, in each case, in
form and substance reasonably satisfactory to the Investor and the Corporation,
and no such consent, Authorization, order or approval shall have been
revoked.

       

      (c)          The
Windset Group shall have completed the Canadian reorganization and bank
financing (including from FCC and HSBC) on terms reasonably acceptable to the
Investor (which terms, with respect to the FCC financing, shall include a side
letter from FCC (the “FCC Side
Letter”) clarifying and ensuring that, among other things, the payment of
any dividend to the Investor as set forth in the Transaction Documents or the
Constating Documents shall be permitted so long as no event of default (as such
term is defined in the agreements entered into with FCC and HSBC) has occurred
and is continuing under the Canadian Credit Agreement with FCC.)

       

      Section
6.02    Conditions to Obligations of the
Investor.  The obligations of the Investor to consummate the
transactions contemplated by this Agreement shall be subject to the fulfilment
or the Investor’s waiver, at or prior to the Closing, of each of the following
conditions:

       

      (a)          The
representations and warranties of the Corporation contained in this Agreement,
the other Transaction Documents and any certificate or other writing delivered
pursuant hereto shall be true and correct in all respects (in the case of any
representation or warranty qualified by materiality or Material Adverse Effect)
or in all material respects (in the case of any representation or warranty not
qualified by materiality or Material Adverse Effect) on and as of the date
hereof and on and as of the Closing Date with the same effect as though made at
and as of such date (except those representations and warranties that address
matters only as of a specified date, the accuracy of which shall be determined
as of that specified date in all respects).

       

      (b)          Each
member of the Windset Group shall have duly performed and complied in all
material respects with all agreements, covenants and conditions required by this
Agreement and each of the other Transaction Documents to be performed or
complied with by it prior to or on the Closing Date; provided, that, with respect
to agreements, covenants and conditions that are qualified by materiality, the
Corporation shall have performed such agreements, covenants and conditions, as
so qualified, in all respects.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (c)          No
Action shall have been commenced against the Corporation which would prevent the
Closing. No injunction or restraining order shall have been issued by any
Governmental Authority, and be in effect, which restrains or prohibits any
transaction contemplated hereby.

       

      (d)          All
approvals, consents and waivers necessary to consummate the transactions
contemplated by this Agreement shall have been received, and executed
counterparts thereof shall have been delivered to the Investor at or prior to
the Closing.

       

      (e)          There
shall not have occurred any Material Adverse Effect, nor shall any event or
events have occurred that, individually or in the aggregate, with or without the
lapse of time, could reasonably be expected to result in a Material Adverse
Effect.

       

      (f)           The
Transaction Documents (other than this Agreement) shall have been executed and
delivered by the parties thereto, on terms both satisfactory and tax
advantageous the Parties, and true and complete copies thereof shall have been
delivered to the Investor.

       

      (g)          The
Investor shall have received a certificate, dated as of the Closing Date and
signed by a duly authorized officer of the Corporation, that (x) each of the
conditions set forth in Section
6.02(a) and Section
6.02(b) have been satisfied, and (y) confirms that Steven Newell and John
Newell continue to serve as Chief Executive Officer and Chief Operating Officer,
respectively, of the Corporation.

       

      (h)          The
Investor shall have received a certificate of the Secretary or an Assistant
Secretary (or equivalent officer) of the Corporation certifying that (x)
attached thereto are true and complete copies of all resolutions adopted by the
Board of Directors of the Corporation authorizing the execution, delivery and
performance of this Agreement and the other Transaction Documents and the
consummation of the transactions contemplated hereby and thereby, and that all
such resolutions are in full force and effect and are all the resolutions
adopted in connection with the transactions contemplated hereby and thereby; and
(y) attached thereto is a true and complete copy of the Constating Documents in
effect at least one (1) Business Day prior to the Closing Date.

       

      (i)           The
Investor shall have received a certificate of the Secretary or an Assistant
Secretary (or equivalent officer) of the Corporation certifying the names and
signatures of the officers of the Corporation authorized to sign this Agreement,
the Transaction Documents and the other documents to be delivered hereunder and
thereunder.

       

      (j)           The
Investor shall have received the fully executed FCC Side Letter, in a form
reasonably acceptable to the Investor.

       

      (k)          The
Investor shall have received from Fasken Martineau DuMoulin LLP, counsel for the
Corporation, an opinion, dated as of the Closing Date, in a form reasonably
acceptable to the Investor.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (l)           As
of the Closing Date, the Board shall be comprised of Dr. John P. Newell, Sylvia
Helen Newell, Steven Newell, John Newell and Ron Midyett, and each member of the
Board shall have entered into indemnity agreements in a form reasonably
acceptable to the Investor.

       

      (m)       
The Corporation, the Investor, Newell Capital Corporation, Dr. John P. Newell,
John Newell, Steven Newell and Sylvia Helen Newell shall have executed and
delivered the Shareholders’ Agreement in a form reasonably acceptable to the
Investor (the “Shareholders’
Agreement”).

       

      (n)          The
Corporation shall have (x) filed the Articles of Amendment, in a form reasonably
acceptable to the Investor, with Industry Canada on or prior to the Closing
Date, which shall continue to be in full force and effect as of the Closing
Date, and (y) qualified the Shares under applicable Canadian securities
laws.

       

      (o)          The
Corporation shall have delivered to the Investor a good standing certificate (or
its equivalent) for the Corporation from the Registrar of Companies of British
Columbia and a compliance certificate for the Company from Industry
Canada.

       

      (p)          The
Corporation shall have executed agreements with Kubo and JW Design regarding the
U.S. Facility on terms reasonably acceptable to the Investor.

       

      (q)          The
Subordination Agreement by and among the Corporation, the Investor and certain
members of the Newell Family shall be executed by the parties thereto on terms
reasonably acceptable to the Investor.

       

      (r)           The
Corporation shall have delivered, or caused to be delivered, to the Investor the
Share Certificates, free and clear of Encumbrances.

       

      (s)          All
current and former Employees and consultants shall have entered into the
Corporation’s standard form proprietary information and inventions agreement, in
form previously presented and acceptable to the Investor.

       

      (t)           The
Investor shall have satisfactorily completed legal, tax, operational and other
due diligence of the Corporation, including review and analysis of the Related
Party Agreements.

       

      (u)          The
Corporation shall have delivered to the Investor such other documents or
instruments as the Investor reasonably requests and are reasonably necessary to
consummate the transactions contemplated by this Agreement.

       

      Section
6.03    Conditions to Obligations of the
Corporation.  The obligations of the Corporation to consummate
the transactions contemplated by this Agreement shall be subject to the
fulfilment or the Corporation’s waiver, at or prior to the Closing, of each of
the following conditions:

       

      (a)          The
representations and warranties of the Investor contained in Article IV shall be
true and correct in all material respects on and as of the Closing Date with the
same effect as though such representations and warranties had been made on and
as of the Closing Date.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      (b)          All
covenants, agreements and conditions contained in this Agreement to be performed
by the Investor on or prior to the Closing Date shall have been performed or
complied with in all material respects.

       

      (c)          All
authorizations, approvals or permits of any Governmental Authority that are
required in connection with the lawful issuance and sale of the Purchased Shares
pursuant to this Agreement shall be obtained and effective as of the Closing
Date.

       

      (d)          The
Corporation shall have received a certificate, dated as of the Closing Date and
signed by a duly authorized officer of the Investor, that each of the conditions
set forth in Section
6.03(a) and Section
6.03(b) have been satisfied.

       

      (e)          The
Corporation shall have received a certificate of the Secretary or an Assistant
Secretary (or equivalent officer) of the Investor certifying that attached
thereto are true and complete copies of all resolutions adopted by the Board of
Directors of the Investor authorizing the execution, delivery and performance of
this Agreement and the other Transaction Documents and the consummation of the
transactions contemplated hereby and thereby, and that all such resolutions are
in full force and effect and are all the resolutions adopted in connection with
the transactions contemplated hereby and thereby.

       

      (f)           The
Investor shall have delivered to the Corporation a good standing certificate (or
its equivalent) for the Investor from State of Delaware.

       

      ARTICLE
VII    Indemnification

       

      Section
7.01    Survival. All representations
and warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Closing until the expiration of three (3) years from
the Closing Date, and, thereafter, to the extent a claim is made prior to such
expiration with respect to any breach of such representation, warranty or
agreement, until such claim is finally determined or settled; provided, that the
representations and warranties in Section 3.01, Section 3.02, Section 3.08, Section 3.11 and the
covenants in Section
2.05 shall survive indefinitely, and the representations and warranties
in Section 3.20, Section
3.22 and Section 3.23 shall survive for the
full period of all applicable statutes of limitations (giving effect to any
waiver, mitigation or extension thereof) plus 60 days; provided further, that such
expiration shall not affect the rights of the Investor and its successors and
assigns, Subsidiaries and Affiliates and its and their respective officers,
directors, sellers, employees and agents to otherwise seek recovery for a claim
arising out of any fraud, wilful breach, or intentional misrepresentation by any
member of the Windset Group until the expiration of any applicable statute of
limitations with respect thereto. Notwithstanding the foregoing, any claims
asserted in good faith with reasonable specificity (to the extent known at such
time) and in writing by notice from the non-breaching Party to the breaching
Party prior to the expiration date of the applicable survival period shall not
thereafter be barred by the expiration of the relevant representation or
warranty and such claims shall survive until finally resolved.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Section
7.02    The Investor Warranty
Claims.  Except as hereinafter set forth, the Corporation (the
“Indemnifying Party”)
shall indemnify and hold harmless on an after-tax basis the Investor and its
successors and assigns, Subsidiaries and Affiliates and its and their respective
officers, directors, sellers, employees and agents (collectively, the “Indemnified Party”), against,
and in respect of, any and all Losses which may arise out of: (i) any
misrepresentation in, or breach or violation of this Agreement by any member of
the Windset Group; (ii) any breach or non-fulfilment of any of the
representations, warranties, agreements, obligations or covenants made in this
Agreement by any member of the Windset Group; (iii) any inaccuracy or
misrepresentation in the Schedules hereto or in any certificate or document
delivered in accordance with the terms of this Agreement by any member of the
Windset Group; or (iv) Taxes of any member of the Windset Group for any period
ending on or before the Closing Date or otherwise allocable to a portion of the
period ending on or before the Closing Date; provided however, that the
Investor shall be entitled to indemnification hereunder only when the aggregate
of all such the Investor Warranty Claims exceeds US$100,000 (the “Indemnification Threshold”);
provided further
however that (x) once such Losses for which the Investor is entitled to
indemnification hereunder exceeds the Indemnification Threshold, then the
Corporation shall be liable from the first dollar of all such Losses, and (y)
the cumulative liability of the Corporation for indemnification payments
hereunder shall not exceed US$15,000,201 (exclusive of all reasonable expenses
of investigation and reasonable attorneys’ fees and expenses incurred by the
Investor in connection with any action, suit or proceeding).  In
determining the amount of any Losses for which the Investor is entitled to
assert a claim for indemnification hereunder, the amount of any such Losses
shall be determined after deducting therefrom the amount of any insurance
proceeds (after giving effect to any applicable deduction or retention) and
other third party recoveries actually received by the Investor in respect of
such Losses and the amount of any tax benefit related thereto (net of any Tax
Liability resulting from the indemnification payment).  If an
indemnification payment is received by the Investor and the Investor receives
insurance proceeds, other third party recoveries or tax benefits in respect of
the related Losses, the Investor shall immediately refund the Indemnifying
Party, paying last dollars first, in a sum equal in the aggregate to the lesser
of (y) the actual amount of such insurance proceeds, other third party
recoveries and tax benefits or (z) the actual amount of the indemnification
payment previously paid by the Indemnifying Party with respect to such
Losses.

       

      Section
7.03    Third Party
Claims.  Without regard to the limitations set forth in Section
7.02 hereof, the Corporation shall indemnify and hold the Investor and its
successors and assigns, Subsidiaries and Affiliates and its and their respective
officers, directors, sellers, employees and agents harmless on an after-tax
basis against any and all damages, claims, losses, liabilities and expenses,
including, without limitation, reasonable legal, Tax, accounting and other
expenses, arising out of any legal, Tax, governmental or administrative action,
suit or proceeding against the Investor, which legal, Tax, governmental or
administrative action, suit or proceeding arises from the conduct of the
Business of the Windset Group prior to the Closing Date or from events that
occurred prior to Closing Date and relate to the ownership or condition of the
properties owned or leased by the Windset Group prior to the Closing
Date.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Section
7.04    Notice of
Claim.  Upon obtaining knowledge thereof, the Indemnified Party
shall promptly notify the Indemnifying Party in writing of any damage, claim,
loss, liability or expense which the Indemnified Party has determined has given
or could give rise to a claim under this Article VII (such written notice being
hereinafter referred to as a “Notice of Claim”); provided that the failure to
provide prompt notice shall not relieve the Indemnifying Party of its
indemnification obligations hereunder.  A Notice of Claim shall
contain a brief description of the nature and estimated amount of any such claim
giving rise to a right of indemnification.

       

      Section
7.05    Defense of Third Party
Claims.  With respect to any claim or demand set forth in a
Notice of Claim relating to a third party claim, the Indemnifying Party may
defend, in good faith and at its expense, any such claim or demand, and the
Indemnified Party, at its expense, shall have the right to participate in the
defense of any such third party claim; provided, however, that the
Corporation shall not have the right to defend any claim with respect to Taxes
to the extent that resolution of such claim could affect the Tax Liability of
the Investor, its Affiliates or Subsidiaries with respect to any
period.  So long as the Indemnifying Party is defending in good faith
any such third party claim, the Indemnified Party shall not settle or compromise
such third party claim.  If the Indemnifying Party does not so elect
to defend any such third party claim, the Indemnified Party shall have no
obligation to do so.

       

      ARTICLE
VIII         
Miscellaneous

        

      Section
8.01    Expenses.  Except as
otherwise expressly provided herein, all costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses, whether or not the Closing shall have occurred; provided, however, promptly
following the Closing, the Corporation shall reimburse the Investor for its
expenses (whether external or internal) arising in connection with the
transactions contemplated by this Agreement.

       

      Section
8.02    Notices.  All
notices, requests, consents, claims, demands, waivers and other communications
hereunder shall be in writing and shall be deemed to have been given
(a) when delivered by hand (with written confirmation of receipt); (b) when
received by the addressee if sent by a nationally recognized overnight courier
(receipt requested); (c) on the date sent by facsimile or e-mail of a PDF
document (with confirmation of transmission) if sent during normal business
hours of the recipient, and on the next Business Day if sent after normal
business hours of the recipient or (d) on the third day after the date mailed,
by certified or registered mail, return receipt requested, postage prepaid. Such
communications must be sent to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section
8.02):

      


      
        
          	
                  If
      to the Corporation:

                	
                  Windset
      Holdings 2010 Ltd.

                  3660
      41-B Street

                  Delta,
      BC Canada V4K 3N2

                  Facsimile:
      604-940-7711

                  E-mail:
      tmartin@windset.com

                  Attention:             Chief
      Financial Officer

                


        

      

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      
        
          	
                  with
      a copy to:

                	
                  Fasken
      Martineau DuMoulin LLP

                  2900-550
      Burrard Street

                  Vancouver
      (BC) V6C 0A3, Canada

                  Facsimile:              604-632-3124

                  E-mail:
      ajackson@fasken.com

                  Attention:             Andrew
      P. Jackson

                
	
                  If
      to the Investor:

                	
                  Apio,
      Inc.

                  P.O.
      Box 727

                  Guadalupe,
      California 93434

                  Facsimile:              805-343-0745

                  E-mail:  rmidyett@apioinc.com

                  Attention:             Chief
      Executive Officer

                
	
                  with
      a copy to:

                	
                  Orrick,
      Herrington & Sutcliffe LLP

                  405
      Howard Street

                  San
      Francisco, California 94105, U.S.A.

                  Facsimile:              415-773-5759

                  E-mail:
      dolphhellman@orrick.com

                  Attention:             Dolph
      Hellman

                


        

      

      


      Section
8.03    Interpretation.  For
purposes of this Agreement, (a) the words “include,” “includes” and “including”
shall be deemed to be followed by the words “without limitation”; (b) the word
“or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto”
and “hereunder” refer to this Agreement as a whole.  Unless the
context otherwise requires, references herein: (x) to Articles, Sections and
Disclosure Schedules mean the Articles and Sections of, and Disclosure Schedules
to this Agreement; (y) to an agreement, instrument or other document means such
agreement, instrument or other document as amended, supplemented and modified
from time to time to the extent permitted by the provisions thereof and (z) to a
statute means such statute as amended from time to time and includes any
successor legislation thereto and any regulations promulgated thereunder. This
Agreement shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting an instrument or
causing any instrument to be drafted. The Disclosure Schedules referred to
herein shall be construed with, and as an integral part of, this Agreement to
the same extent as if they were set forth verbatim herein.

       

      Section
8.04    Headings.  The
headings in this Agreement are for reference only and shall not affect the
interpretation of this Agreement.

       

      Section
8.05    Severability.  If
any term or provision of this Agreement is invalid, illegal or unenforceable in
any jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other term or provision of this Agreement or invalidate or render
unenforceable such term or provision in any other jurisdiction. Upon such
determination that any term or other provision is invalid, illegal or
unenforceable, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the greatest
extent possible.


      
        
           


        

        
           


          
            

          

        

        
           


        

      

       

      Section
8.06    Entire
Agreement.  This Agreement and the other Transaction Documents
constitute the sole and entire agreement of the parties to this Agreement with
respect to the subject matter contained herein and therein, and supersede all
prior and contemporaneous understandings and agreements, both written and oral,
with respect to such subject matter. In the event of any inconsistency between
the statements in the body of this Agreement and those in the other Transaction
Documents and Disclosure Schedules (other than an exception expressly set forth
as such in the Disclosure Schedules), the statements in the body of this
Agreement will control.

       

      Section
8.07    Successors and
Assigns.  This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. Neither party may assign its rights or obligations hereunder
without the prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, however, that prior
to the Closing Date, the Investor may, without the prior written consent of the
Corporation, assign all or any portion of its rights under this Agreement to one
or more of its direct or indirect wholly-owned Subsidiaries. No assignment shall
relieve the assigning party of any of its obligations hereunder.

       

      Section
8.08    No Third-party
Beneficiaries.  Except as provided in Section 8.07 and Article VII, this Agreement is
for the sole benefit of the parties hereto and their respective successors and
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other Person or entity any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this
Agreement.

       

      Section
8.09    Amendment and Modification; Waiver.
This Agreement may only be amended, modified or supplemented by an
agreement in writing signed by each party hereto. No waiver by any party of any
of the provisions hereof shall be effective unless explicitly set forth in
writing and signed by the party so waiving. No waiver by any party shall operate
or be construed as a waiver in respect of any failure, breach or default not
expressly identified by such written waiver, whether of a similar or different
character, and whether occurring before or after that waiver. No failure to
exercise, or delay in exercising, any right, remedy, power or privilege arising
from this Agreement shall operate or be construed as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.

       

      Section
8.10    Governing Law; Dispute Resolution
Mechanism.

       

      (a)           This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of California without giving effect to any choice or conflict
of law provision or rule (whether of the State of California or any other
jurisdiction) that would cause the application of Laws of any jurisdiction other
than those of the State of California.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      (b)           All
disputes arising under the Agreement shall be resolved in the following
manner.  The senior management of both parties shall meet to attempt
to resolve such disputes.  If the senior management cannot resolve the
disputes, either party may make a written demand for formal dispute resolution
and specify therein the scope of the dispute.  Within thirty (30) days
after such written notification, the parties agree to meet for one (1) day with
an impartial mediator and consider dispute resolution alternatives other than
litigation.  If an alternative method of dispute resolution is not
agreed upon within thirty (30) days after the one day mediation, either party
may begin litigation proceedings.

       

      Section
8.11    Specific
Performance.  The parties agree that irreparable damage would
occur if any provision of this Agreement were not performed in accordance with
the terms hereof and that the parties shall be entitled to specific performance
of the terms hereof, in addition to any other remedy to which they are entitled
at law or in equity.

       

      Section
8.12    Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall be deemed to be one and the same
agreement. A signed copy of this Agreement delivered by facsimile, e-mail or
other means of electronic transmission shall be deemed to have the same legal
effect as delivery of an original signed copy of this Agreement.

       

      [SIGNATURE
PAGE FOLLOWS]

       

      
        
           


        

        
           


          
            

          

        

        
           


        

      

      


      IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the date first written above by their respective officers thereunto duly
authorized.

       

      
        
          
            	 
      	
                    WINDSET
      HOLDINGS 2010 LTD.

                  
	 	 
	 
      	
                    By

                  	
                    /s/ Steven Newell

                  
	 
      	
                    Name:
      Steven Newell

                  
	 
      	
                    Title:
      President

                  


          

        

      

      


      
        
          
            	 
      	
                    APIO,
      INC.

                  
	 	 
	 
      	
                    By

                  	
                    /s/ Ron L. Midyett

                  
	 
      	
                    Name:
      Ron L. Midyett

                  
	 
      	
                    Title:
      CEO, Apio, Inc.

                  


          

        

      

       

      Signature
Page to Share Purchase Agreement