The foregoing description of the Asset Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Asset Purchase Agreement, which is filed as Exhibit 10.1 hereto, and is incorporated by reference herein.

Effective December 13, 2013, the Company, Schrurs and Mr. Serge Schrurs entered into an amended asset purchase agreement (the "Amended Asset Purchase Agreement"), which shall be deemed to terminate and replace the initial Asset Purchase Agreement. The Amended Asset Purchase Agreement provides that the title to and economic risk in respect of the Permit and the Employees passed to the Company on December 13, 2013 (the "Closing Date"), however, the title to the Equipment shall only pass to the Company subject to full payment of the purchase price for the Assets notwithstanding the fact that physical possession and economic risk in respect of the Assets passed to the Company on the Closing Date. The Company shall not transfer, pledge or otherwise encumber the Equipment until the purchase price for the Assets has been paid in full. The retention of title on the Equipment can be enforced by Schrurs at any point in time and regardless of the outstanding amount of the purchase price at that point in time, it being understood that such retention of title shall at any time be enforced in respect to all of the Equipment. Schrurs and the Company agree to undertake that, in the event that upon enforcement of the retention of title, the market value of the Equipment would exceed the outstanding amount of the purchase price, Schrurs shall pay a surcharge to the Company (equal to the difference between the outstanding amount of the purchase price and the market value of the Equipment) so as to ensure that all of the Equipment is regained.

In addition, the Amended Asset Purchase Agreement provides that the Company shall have until the fifth anniversary of the Closing Date instead of the third anniversary as provided for under the initial Asset Purchase Agreement in order to fully pay the outstanding debts of Schrurs owing to KBC and BNP Paribas.

Furthermore, the Amended Asset Purchase Agreement removed any conditions precedent to closing, however, at closing Schrurs was required to deliver to the Company a declaration from each BNP Paribas and KBC with respect to the debts and liabilities owed by Schrurs to each of

them that they explicitly and unconditionally approve and consent to (i) the Amended Asset Purchase Agreement, and (ii) the fact that KBC debts and BNP Paribas debts shall be repaid by the Company on behalf of Schrurs and that any such repayment by the Company of any amount of the KBC debts and/or the BNP Paribas debts shall discharge Schrurs from its payment obligations towards KBC and/or BNP Paribas for the same amount.

Moreover, due to the retention of title provision added to the Amended Asset Purchase Agreement, the explicit termination clause was removed.

Finally, pursuant to the Amended Asset Purchase Agreement, Schrurs granted the Company a Belgian common law lease with respect to the building housing the Facility for a term of 10 years. The terms and conditions of such lease, which will also include a purchase option for the Company on the building housing the Facility, will be negotiated in good faith between Schrurs and the Company immediately following the Closing Date in accordance with Belgian standard market practices, and will be formalized in a lease agreement to be entered into no later than January 31, 2014.

The foregoing description of the Amended Asset Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Amended Asset Purchase Agreement, which is filed as Exhibit 10.2 hereto, and is incorporated by reference herein.

The Company, as "Borrower" entered into the following loan arrangements with each of the following Directors of the Company: Jason Finnis ("Finnis"), Kenneth Barker ("Barker") and Robert Edmunds ("Edmunds"; and each of Messrs. Finnis, Barker and Edmunds being singularly and collectively referred to as the "Lender" and "Lenders", respectively, as the context may require):

The foregoing description of the Finnis Amended Promissory Note does not purport to be complete and is qualified in its entirety by reference to the Finnis Amended Promissory Note, which is filed as Exhibit 10.3 hereto, and is incorporated by reference herein.

The foregoing description of the Barker Amended Promissory Note does not purport to be complete and is qualified in its entirety by reference to the Barker Amended Promissory Note, which is filed as Exhibit 10.4 hereto, and is incorporated by reference herein.

The foregoing description of the Edmunds Amended Promissory Note does not purport to be complete and is qualified in its entirety by reference to the Edmunds Amended Promissory Note, which is filed as Exhibit 10.5 hereto, and is incorporated by reference herein.

On December 19, 2013, but having an effective date of November 29, 2013, the Company and IKEA Supply AG ("IKEA") entered into a loan agreement (the "Loan Agreement") whereby IKEA agreed to loan (the "IKEA Loan") the Company the amount of EUR 2,190,000 (approximately CAD$3.2 million) having a term until June 25, 2016 and bearing interest at a rate of 1.9% per annum. The Company is required to make monthly repayments of EUR11,000 from December 20, 2014 to June 20, 2016 and the outstanding amount including accrued and capitalized interest repaid in full on June 25, 2016, with all payments to be net of any withholding or similar taxes or fees collected at the source. As security for the IKEA Loan, IKEA required that the IKEA Loan be secured by assets purchased with the proceeds as well as a portion of the secured assets used to secure the July 26, 2013 10% Secured Convertible Debentures, which were disclosed on a Current Report on Form 8-K filed with the SEC on July 31, 2013.

The proceeds from the IKEA Loan are designated for the installation of equipment to support and expand the Company's European production facility and working capital for IKEA orders.

The foregoing description of the Loan Agreement with IKEA does not purport to be complete and is qualified in its entirety by reference to the Loan Agreement, which is filed as Exhibit 10.6 hereto, and is incorporated by reference herein.

In conjunction with entering into the Loan Agreement with IKEA, the Company and IKEA have entered into a General Agreement (the "General Supply Agreement") which provides for the order, shipping and delivery of the Company's flax fiber product for use in certain of IKEA's domestic textiles categories. In addition, the General Supply Agreement provides for minimum

order quantities, fiber property requirements, formula for calculating price, restriction on the Company's ability to supply CRAiLAR^(R) fiber to other persons for consumption in home textile applications as long as IKEA fulfills its commitment to capacity as set out in the agreement on sales and purchase volumes as provided in appendix 5 to the General Supply Agreement. The General Supply Agreement has a term until December 31, 2016 when it shall expire without either party having to provide notice thereof. However, IKEA may in its sole discretion extend the contract a maximum of two (2) times for 36 months each time by notifying the Company no later than six (6) months prior to the expiration of any term to the General Supply Agreement.

The foregoing description of the General Supply Agreement with IKEA does not purport to be complete and is qualified in its entirety by reference to the General Supply Agreement, which is filed as Exhibit 10.7 hereto, and is incorporated by reference herein.

In conjunction with entering into the Loan Agreement with IKEA, the Company, IKEA and Schrurs NV ("Schrurs") have entered into a Framework Agreement Development Work (the "Framework Agreement") whereby IKEA has engaged the Company and Schrurs (each a "Development Partner" and collectively, the "Development Partners") to pursue Development Work (as defined in the Framework Agreement). During the term of the Framework Agreement, which commences on December 13, 2013 and continues until terminated by either party giving no less than six (6) months' prior notice, subject to the Framework Agreement immediately expiring and becoming null and void if either party commits a material breach of any of the provisions therein and does not remedy the situation within 14 days after receiving written notification stating the extent of the breach, IKEA shall be entitled to request Development Work from one or both Development Partners and each Development Partner shall be entitled to either accept or deny a request it received from IKEA. Once the arrangements for the requested Development Work have been agreed by the relevant parties, IKEA shall place an Assignment Order which shall be in the form attached as Exhibit 1 to the Framework Agreement. The Development Work shall be performed at a location as set out in each separate Assignment Order. In consideration of the provisions of a particular Assignment Order, IKEA shall pay to the Development Partners a fee as stated in the relevant Assignment Order. Each Development Partner shall issue an invoice at the end of each calendar month in respect of the Development Work provided during that month or in accordance with the invoicing schedule set out in the relevant Assignment Order. IKEA shall pay the fee within 30 days of receipt of the properly drawn up invoice. Under the Framework Agreement, except for the National Research Council of Canada's rights to use for government purposes certain additions or changes to the NRC technology produced by the Company, IKEA or anyone to whom IKEA may assign its rights, shall be the exclusive owner of all Works and Foreground Information (as defined in the Framework Agreement) created during the provision of the Development Work. Notwithstanding the foregoing, the parties may stipulate in the individual Order that the Company, or anyone to whom the Company may assign its rights, shall be the exclusive owner of the Works and Foreground Information. Where IKEA will be the exclusive owner of the Works, IKEA shall have the right to revise, further develop, adapt, alter, display, copy, manufacture, sell, advertise, or otherwise dispose of the Works in any way IKEA deems suitable for technical, business, economic or other reasons, including moving or starting up production at/to other suppliers. The Development Partners may not, without the prior written permission of IKEA, transfer any rights or obligations under the Framework Agreement to any third party. The Development Partners may not subcontract any part of the Development Work without IKEA's prior written approval.

On December 13, 2013, IKEA, the Company and Schrurs entered into an Assignment Order for Development Work on Fiber Quality Consistency ("Assignment Order 1-1"), attached as Exhibit 1-1 to the Framework Agreement. Assignment Order 1-1's goal is to be able to produce flax fiber which has properties that can be used in existing unmodified cotton spinning setups with a performance close to cotton. The Assignment Order 1-1 provides for the deliverables, technical specifications, instructions for handling deliverables, time table/project plan, location, reference persons and the specified resources at the Development Partner to have the Development Work performed. The Company is required to cover the cost for this quality consistency agenda, as the outcome of the work will become the Company's property.

In addition on December 13, 2013, IKEA, the Company and Schrurs entered into an Assignment Order for Development Work on Hemp Fiber Development ("Assignment Order 1-2"), attached as Exhibit 1-2 to the Framework Agreement. Assignment Order 1-2's goal is to be able to produce hemp fiber which has properties that can be used in existing unmodified cotton spinning setups with a performance close to cotton. The Assignment Order 1-2 provides for the deliverables, technical specifications, instructions for handling deliverables, time table/project plan, location, reference persons and the specified resources at the Development Partner to have the Development Work performed. The Company is required to cover the cost for this quality consistency agenda, as the outcome of the work will become the Company's property.

The foregoing description of the Framework Agreement Development Agreement does not purport to be complete and is qualified in its entirety by reference to the Framework Agreement Development Agreement, which is filed as Exhibit 10.8 hereto, and is incorporated by reference herein.

In conjunction with entering into the Loan Agreement with IKEA, the Company, IKEA and the National Research Council of Canada (the "NRC") have entered into a Tripartite Agreement (the "Tripartite Agreement") whereby at any time before the repayment in full by the Company to IKEA of the IKEA Loan, including interest pursuant to the Loan Agreement and for two years thereafter, upon the occurrence of a Termination Event (as defined in the Tripartite Agreement) in accordance with Article 11 of the Licensing Agreement between the NRC and the Company, dated October 25, 2006 and amended on March 25, 2011, which provides the Company with the worldwide right to use NRC technologies for the extraction of hemp fiber and the enzymatic extraction of plant fiber, the NRC hereby grants to IKEA a new license that allows IKEA to substitute the Company with either an IKEA affiliate or a third party mutually agreed with the NRC, and to permit such new licensee to operate IKEA's business related to the NRC technology under substantially the same conditions as set out in the Licensing Agreement. In such case, any payments owed by IKEA to the Company are to be paid directly to the NRC. Upon occurrence of a Termination Event, the NRC and IKEA shall enter into a new license agreement that adequately reflects the new situation, on similar terms and conditions as the Licensing Agreement and reasonably taking into account any changes resulting from the Termination Event. IKEA's license to the NRC Intellectual Property (as defined in the Tripartite Agreement) shall however be limited to applications relevant for enzymatically processed flax and/or hemp fibers for spinning yarn in which applications relevant for the product applications listed in Appendix 1 (home textile applications) to the Tripartite Agreement shall be granted on an exclusive basis until December 31, 2016 and non-exclusive thereafter. Each of the NRC and the Company warrants to IKEA that it has not previously granted any rights that would conflict with the rights granted in this amendment. Each of the NRC and the Company also warrants to IKEA that it is either the current owner or licensee (with power to sub-license) of the NRC Technology, as defined in the Licensing Agreement.

The foregoing description of the Tripartite Agreement does not purport to be complete and is qualified in its entirety by reference to the Tripartite Agreement, which is filed as Exhibit 10.9 hereto, and is incorporated by reference herein.

In accordance with the conditions of the IKEA Loan, the Company approached the debentureholders (the "Debentureholders") of the 10% Secured Convertible Debentures, which were issued on July 26, 2013 and which are governed pursuant to the Convertible Debenture Indenture (the "Indenture") between the Company and Computershare Trust Company of Canada (the "Trustee"), about releasing their security over certain assets held by the Company's subsidiary, Crailar Inc., a Nevada limited liability company, having an acquisition cost of $1,331,794, which form a portion of the assets secured pursuant to the Guaranty and Security Agreement (the "Guaranty") between Crailar Inc. (the "Guarantor") and the Trustee, dated July 26, 2013, as set forth in Schedule "A" to the Guaranty, to be used as separate security for the IKEA Loan to the Company.

The Debentureholders have signed an Extraordinary Written Consent Resolution of Debentureholders (the "Extraordinary Resolution"), dated to be effective as of December 17, 2013, pursuant to Section 11.11(b) and 11.15 of the Indenture, whereby the Debentureholders have authorized the modification and alteration of the rights of the Debentureholders and the Trustee against the Company with respect to the Secured Assets (as defined in the Indenture) set out in Schedule "F" to the Indenture and as set out in Schedule "A" to the Guaranty to now only include those specific assets held by the Guarantor as set forth in Schedule "A" attached to the Amended and Restated Guaranty and Security Agreement which have an acquisition cost of $3,922,240; and as consideration for such modification and alteration with respect to the Secured Assets, the Debentureholders require the Conversion Price (the "Conversion Price") of the Debentures to be reduced from $2.00 per common share in the capital of the Company (each a "Common Share") to $1.25 per Common Share, which was the closing price on the day prior to the July 3, 2013 news release with respect to the 10% Secured Convertible Debenture Private Placement and which is the same as the exercise price of the warrants issued in connections with such financing.

On December 23, 2013, the Company and the Trustee entered into an Amended and Restated Convertible Debenture Indenture (the "Amended and Restated Convertible Debenture Indenture"), which reflects the modification and alteration of the rights of the Debentureholders and the Trustee against the Company with respect to (i) the Secured Assets to now only include those specific assets held by the Guarantor as set forth in Schedule "F" to the Amended and Restated Convertible Debenture Indenture having an acquisition cost of $3,922,240, and (ii) the reduction of the Conversion Price of the Debentures from $2.00 per Common Share to $1.25 per Common Share.

In addition, on December 23, 2013, the Guarantor and the Trustee entered into an Amended and Restated Guaranty and Security Agreement (the "Amended and Restated Guaranty and Security Agreement"), which forms Schedule "G" to the Amended and Restated Convertible Debenture Indenture, and which reflects the modification and alteration with respect to the Secured Assets to now only include those specific assets held by the Guarantor as set forth in Schedule "A" to the Amended and Restated Guaranty and Security Agreement.

The foregoing description of the Amended and Restated Convertible Debenture Indenture does not purport to be complete and is qualified in its entirety by reference to the Amended and Restated Convertible Debenture Indenture, which is filed as Exhibit 4.1 hereto, and is incorporated by reference herein. The form of the Amended and Restated Guaranty and Security Agreement is attached to the Amended and Restated Convertible Debenture Indenture as Schedule "G".

The information set forth under Item 1.01 with respect to the Amended Promissory Notes, Loan Agreement with IKEA, Amended and Restated Convertible Debenture Indenture and Amended and Restated Guaranty and Security Agreement of this Current Report on Form 8-K are incorporated by reference into this Item 2.03.