(1)     SCHRURS NV, an open limited liability company ("naamloze vennootschap / société anonyme") incorporated under the laws of Belgium, having its registered office at Pijpestraat 18, 8560 Wevelgem, registered with the Crossroads Databank for Enterprises under number (Kortrijk) 0452.656.339 (the "Seller"),

(2)     CRAILAR TECHNOLOGIES INC., a company incorporated under the laws of Canada, having its registered office at Chatterton Way 305-4420, Victoria, British Columbia V8X 5J2 (Canada), acting in its own name and for its own account as well as in the name and for the account of an Affiliate (the "Purchaser"),

The Seller and the Purchaser are hereinafter collectively referred to as the "Parties" and each individually (also) as a "Party".

(3)     Mr. SERGE SCHRURS, residing at Pijperstraat 18, 8560 Wevelgem, Belgium, ("Serge Schrurs"), for acceptance of its obligations under Clause 11.1.

2.1.1     Subject to the terms and conditions set forth in this Agreement, the Seller hereby sells, assigns, transfers, conveys and delivers to the Purchaser, and the Purchaser shall accept such sale, assignment, transfer, conveyance and delivery, free of any and all Encumbrances, of any and all rights, title, benefit and interest that the Seller has in and to the following assets (hereinafter collectively referred to as the "Transferred Assets"):

2.1.2     Notwithstanding the above, Parties explicitly agree that the Seller will be allowed to continue to serve its current insulation customers provided that it does not interfere with the Purchaser's operations and that all fees related thereto shall be to the benefit of the Purchaser.

For the avoidance of doubts, it is hereby explicitly agreed upon that the following assets are not transferred to the Purchaser and are thus excluded from the terms and provisions of this Agreement (the "Excluded Assets"):

As of the Closing Date, the Purchaser shall assume the following obligations and liabilities of the Seller:

All obligations, liabilities, debts, Taxes, expenses, costs, charges, commitments, accounts payable, breaches, warranties, guarantees or responsibilities of the Seller which are not Transferred Liabilities, including yet without limitation (i) the Seller's Debts and (ii) any legal, tax and accounting expenses incurred in connection with this Transaction, shall be excluded from the assumption of obligations and liabilities by the Purchaser under this Agreement and shall thus remain with the Seller, irrespective of whether known or unknown, due or not due, and payable or executable before, on or after the Closing Date (the "Excluded Liabilities").

3.1.1     Title to and economic risk in respect of the Transferred Assets mentioned sub Clause 2.1.1 (B) and (C) and the Transferred Liabilities shall pass to the Purchaser on the Closing Date.

3.1.2     Title to the Transferred assets mentioned sub Clause 2.1.1 (A) shall only pass to the Purchaser subject to full payment of the Purchaser Consideration notwithstanding the fact that physical possession and economic risk in respect of such Transferred Assets shall pass to the Purchaser on the Closing Date.

The Purchaser shall not Transfer, pledge or otherwise Encumber the Transferred Assets mentioned sub Clause 2.1.1 (A) until the Purchase Consideration has been paid in full.

The retention of title on the Transferred Assets mentioned sub Clause 2.1.1 (A) resulting from this Clause 3.1.2 can be enforced by the Seller (and the Seller shall thus be entitled to regain such Transferred Assets mentioned sub Clause 2.1.1 (A)) at any point in time and regardless of the outstanding amount of the Purchase Consideration 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 Transferred Assets mentioned sub Clause 2.1.1 (A).

The Seller agrees and undertakes that, in the event that upon enforcement of the retention of title, the market value of the Transferred Assets mentioned sub Clause 2.1.1 (A) would exceed the outstanding amount of the Purchase Consideration, it shall pay a surcharge to the Purchaser (equal to the difference between the outstanding amount of the Purchase Consideration and the market value of the Transferred Assets mentioned sub Clause 2.1.1 (A).) so as to ensure that all Transferred Assets mentioned sub Clause 2.1.1 (A) are regained.

3.1.3     All monies or other items belonging to the Purchaser which are received by the Seller on or after the Closing Date in connection with the Transferred Assets shall immediately be paid or passed by the Seller to the Purchaser.

3.1.4     The Seller and the Purchaser jointly undertake to execute all documents and take all steps as may reasonably be required by the Purchaser to vest the title to the Transferred Assets in accordance with this Clause 3.1 in the name of the Purchaser and to give effect to this Agreement.

3.2     Transferred Employees

3.2.1     Parties acknowledge and agree that the transfer of Transferred Assets and Transferred Liabilities contemplated by this Agreement constitutes a transfer of an undertaking or part of an undertaking, within the meaning of the Collective Bargaining Agreement no. 32bis, as amended, implementing the provisions of the EC Directive 2001/23 dated 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses, as interpreted by the ECJ and the Belgian national courts and any modification of that Directive and all other collective bargaining agreements or other legislation implementing that Directive ("CAO 32bis").

3.2.2     As of the Closing Date, the Purchaser shall employ the Transferred Employees listed in Schedule 5. The Purchaser shall continue to observe the terms and conditions of the employment agreements and shall maintain the working conditions of the Transferred Employees, including the acquired length of service, the salary and other benefits in kind, as applicable on the Closing Date.

3.2.3     The Seller shall be solely responsible for the payment of all wages and the provision of accrued entitlement including premiums, end-of-year premiums, commission, loans, holiday pay) related to the Transferred Employees employment up to the working day immediately preceding the Closing Date. The Seller shall pay to the Purchaser an indemnity equal to all accrued entitlements of the Transferred Employees as if their employment contract would be terminated on the Closing Date including the social security contributions and taxes with respect to these amounts. This indemnity shall be paid within 15 Business Days following receipt by the Seller of a payment request from the Purchaser, duly evidencing the amount(s) for which the Seller is liable in accordance with this Clause 3.2.3.

4.2.1     As of the Closing Date and until the fifth anniversary of such Closing Date, the repayment of the Seller's Debts by the Purchaser shall be made in accordance with the terms of such Seller's Debts and/or the repayment schemes agreed upon between the Seller and the respective creditors of the Seller's Debts. The repayment scheme shall run during a period of five years and the Purchaser shall not be entitled to prior payment.

4.2.2     On the fifth anniversary of the Closing Date, the aggregate outstanding amount under the Seller's Debts at that point in time, shall be (re)paid in whole by the Purchaser to the respective creditors of the Seller's Debts.

Should the tax exempt status in accordance with Article 11 of the Belgian VAT Code be refused by the tax authorities and should VAT be due on the transfer as contemplated in this Agreement, the Purchaser shall pay such VAT on the Purchase Consideration and the Seller shall issue an appropriate invoice for VAT purposes.

The transfer of (i) title and economic risk in respect of the Transferred Assets mentioned in Clause 2.1.1 (B) and (C) and Transferred Liabilities and (ii) economic risk and physical possession in respect of the Transferred Assets mentioned in Clause 2.1.1 (A) (the "Closing') shall take place on the date hereof (the "Closing Date").

5.2.1     Seller's Closing Obligations

5.2.2     Purchaser's Closing Obligations

5.2.3     Joint Closing Obligations

The effectiveness of any action taken at the Closing towards fulfillment of any Closing Obligation is conditional upon completion of all other actions taken towards fulfillment of all other Closing Obligations; failure to complete one of said actions shall automatically render all other such actions null and void.

The Seller warrants to the Purchaser that the representations and warranties set out in Schedule 7 (the "Seller's Representations") are true, accurate and not-misleading on the Closing Date.

Each of the Seller's Representations shall be construed as a separate warranty and is given subject only to the matters which are disclosed in Schedule 9, which shall therefore limit the contents and scope of such Seller's Representations, provided that such matters are described in such detail allowing the Purchaser, assisted by its professional advisors, and taking into account the professional experience of the Purchaser to assess the nature, subject matter and scope and consequence of such matter.

The rights and remedies of the Purchaser in respect of a breach of any of the Representations shall not be affected by the signing of the Agreement, by the Due Diligence or any other investigation made by the Purchaser or by any other prior knowledge of the Purchaser (except as may result from the Disclosure Schedules and then only within the limits of Clause 7.2 hereof), by the giving of any time or other indulgence by the Purchaser to any person, by the Purchaser rescinding or not rescinding this Agreement, or by any other cause whatsoever except a specific waiver or release by the Purchaser in writing and any such waiver or release shall not prejudice or affect any remaining rights or remedies of the Purchaser.

The Seller agrees to fully indemnify the Purchaser against any and all Damages incurred by the Purchaser, resulting from or being a consequence of:

(A)     any breach or inaccuracy of any of the Seller's Representations contained in this Agreement; or

(B)     any breach of any other covenant or obligation of the Seller contained in this Agreement.

The Seller shall have no obligation to indemnify the Purchaser in respect of any Claim unless notification of such claim is given by the Purchaser to the Seller in accordance with Clause 8.1 within 36 months after the Closing Date.

Notwithstanding the preceding, any agreement, representation or warranty in respect of which indemnification may be sought under this Clause 7 shall survive the time at which it would otherwise terminate pursuant to the preceding sentence, if a Claim Notice in respect of the inaccuracy, incompleteness or breach thereof giving rise to such right to indemnity shall have been given to the Party against whom such indemnity may be sought prior to such time.

The Seller shall have no obligation to indemnify the Purchaser in respect of any liability which is contingent ("voorwaardelijke of latente verbintenis" / "obligation conditionnelle ou éventuelle"), unless and until such contingent liability has become an actual liability and is due and payable, provided, however, that this Clause 7.3 shall not have the effect of preventing the Purchaser from validly making a claim in respect of a contingent liability within the time limit specified in Clause 7.2, even though it has not become an actual liability.

Notwithstanding any other provision in this Agreement, the aggregate liability of the Seller under this Agreement shall not exceed the amount of the Purchase Consideration.

The Seller shall have no obligation to indemnify the Purchaser in respect of any Claim arising from any single Damage where the amount which would otherwise be recoverable under this Agreement in that respect does not exceed EUR 25.000. When the threshold of EUR 25.000 is met, the Purchaser shall only be entitled to recover the amount of the Damages, in excess of such threshold, without prejudice to the other limitations of liability set out herein.

7.6.1     The Seller shall have no obligation to indemnify the Purchaser in respect of any Claim if and to the extent that the Damages in respect of which the Claim is made:

7.6.2     Accordingly, any amount for which the Seller would otherwise have been liable in respect of any Claim shall be reduced by the amount of any insurance proceeds, indemnification or other recovery from any insurance company or any other third party in respect of the Damage which is the subject matter of the Claim.

7.6.3     If the Seller pays an amount in discharge of any Claim and the Purchaser subsequently recovers from any insurance company or any other third party a sum relating to the subject matter of the Claim, the Purchaser shall pay to the Seller an amount equal to the difference between:

7.6.4     If the Seller pays an amount in respect of any Claim, the Purchaser shall assign to the Seller all of its rights arising from the Damage which is the subject matter of that Claim against any insurance company or other third party, to the extent such assignment is permitted.

If the same event, matter or circumstances can give rise to a Claim under several provisions of this Agreement, the Purchaser shall only be indemnified once.

Without prejudice to Article 1134, Section 3 of the Belgian Civil Code, the Purchaser shall procure that all reasonable steps are taken to avoid or mitigate any Damages which might give rise to a Claim against the Seller.

None of the limitations contained in this Clause 7 shall apply in case of fraud ("fraude"/"bedrog") or wilful misconduct by the Seller.

In order to make a Claim against the Seller, the Purchaser shall give a notice of such Claim to the Seller within the time limits provided in Clause 7.2 (the "Claim Notice"). Such notice shall set out in reasonable detail the legal and factual basis of the Claim, together with a first bona fide estimate of the amount of the Damages. A copy of all documents establishing the basis of the Claim shall be enclosed in the notice.

8.2.1     The Seller shall give a notice to the Purchaser objecting to the Claim within thirty (30) days following notification of such Claim. Such notice shall contain a statement of the basis of the Seller's objections to the extent available.

8.2.2     If the Seller fails to notify the Purchaser that it objects to such Claim within the period of time provided under Clause 8.2.1, the amount of such Claim shall be conclusively deemed a liability of the Seller who did not object and shall be paid to the Purchaser.

8.2.3     If the Seller objects to a Claim within the period of time provided under Clause 8.2.1, the Parties shall use their best efforts to resolve such dispute and, in the absence of such resolution, such dispute shall be submitted to the courts in accordance with Clause 13.10.

8.3.1     If the Seller has accepted the amount claimed by the Purchaser or if the Seller and the Purchaser have agreed on another amount, the Seller shall pay such amount within 15 (fifteen) calendar days of such acceptance or agreement.

8.3.2     If the matter giving rise to a Claim has been decided by the competent court and the Seller has been ordered to pay any amount pursuant to any enforceable judgement, the Seller shall pay such amount within fifteen calendar days after such judgement has become res judicata.

8.3.3     All payments shall be made in accordance with such instructions as shall be notified by the Purchaser to the Seller.

If the events, matters or circumstances that may give rise to a Claim against the Seller occur or arise as a result of or in connection with a claim by or a liability to a third party (a "Third Party Claim"), then:

8.4.1     the Purchaser shall provide the Seller with copies of all documents and correspondence from that third party, and all other correspondence and documents relating to the Third Party Claim as the Seller may reasonably request, subject to the Seller agreeing to keep all such information and documents confidential and to use them only for the purpose of dealing with the Third Party Claim;

The Seller hereby grants a Belgian common law lease to the Purchaser with respect to the wet processing facility located at Oostkaai 46, 8900 Ieper for a term of 10 years. The terms and conditions of such lease, which will also include a purchase option for the Purchaser on aforementioned wet processing facility, will be negotiated in good faith between Parties 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 "Lease Agreement").

11.1.1     The Seller and Serge Schrurs undertake to the Purchaser they shall not and that they shall procure that their respective Affiliates as well as Serge Schrurs' spouse and relatives in descending order shall not, directly or indirectly, for their own account or in conjunction with or on behalf of any person (as principal, agent, independent, contractor, partner, employee, consultant or otherwise), unless with the prior written consent of the Purchaser:

11.1.2     It is hereby expressly understood that nothing in this Clause 12.1 shall prohibit (i) Serge Schrurs to enter into the Services Agreement and to provide, as an independent contractor, the Purchaser with general management services on the basis thereof or (ii) the Seller to continue serving its current insulation customers provided that it does not interfere with the Purchaser's operations and that all fees related thereto shall be to the benefit of the Purchaser.

11.1.3     The duty not to compete as described in this Clause 11.1 shall remain in full force and effect until the third anniversary of the Closing Date. The limitations set forth in this Clause 11.1 are considered as reasonable by the Parties. In the event a limitation is considered null and void, the provisions of Clause 13.7 shall apply.

11.1.4     In the event of any breach of the covenants contained in this Clause 11.1, the Purchaser shall be entitled to indemnification in cash from the Seller for the Damages caused, it being understood that such Damages will be equal to EUR 150.000. If the Damages effectively suffered by the Purchaser exceed the said amount of EUR 150.000, the Purchaser is entitled to claim from the Seller any excess amount so that he receives full payment of such Damages.

11.2.1     As soon as practicably possible following the Closing Date, the Seller shall deliver to the Purchaser:

11.2.2     Upon receipt of the certificates mentioned in Clause 11.2.1 the Purchaser shall procure:

(A)     the existence of and any of the contents of this Agreement;

(B)     the negotiations relating to this Agreement;

(C)     the Business or affairs of the Purchaser; or

(D)     the other Party.

(A)     required by the law of any relevant jurisdiction, by governmental order or by relevant stock exchange regulations;

(B)     to a court, arbitrator or administrative tribunal in the course of proceedings before it to which the disclosing party is a party in a case where such disclosure is required by such proceedings;

(C)     required to vest the full benefit of this Agreement in either Party or their successors or permitted assigns;

(D)     properly disclosed to the professional advisers, auditors and bankers of each Party (subject to the latter being bound by a confidentiality undertaking);

(E)     the information has come into the public domain other than by that Party's breach of this Agreement; or

(F)     with respect to the Confidential Information referred to in Clause  12.1(C), the information is known in its industry of principal use or independently developed by the Seller;

provided that, to the extent practicable, any such information disclosed pursuant to Clause 12.2 shall be disclosed only after consultation with the other Party.

The Seller shall after the Closing Date execute all such deeds and documents and do all such things as the Purchaser may require for perfecting the Transaction to be effected under or pursuant to this Agreement and for giving the Purchaser the full benefit of the provisions of this Agreement.

13.2     Notices

13.2.1     Any notice, approval, consent or other communication to be made under or in connection with the matters contemplated in this Agreement shall be made in writing and in English and be signed by or on behalf of the Party giving it and shall be delivered personally or sent by fax confirmed by registered mail:

13.2.2     A Party may notify the other Party to this Agreement of a change to its name, relevant addressee, address or fax number for the purposes of the giving of notices or other communications provided that such notification shall only be effective:

The Parties shall pay their own costs in connection with the preparation and negotiation of this Agreement and any matter contemplated by it.

This Agreement (and the documents and agreements referred to herein) contains the entire agreement between the Parties with respect to its subject matter, including for the avoidance of doubts the Initial Agreement which shall be deemed to be terminated by mutual consent between Parties by the execution of this Amended Agreement.

No amendment of this Agreement shall be effective unless it is made in writing and signed by duly authorised representatives of all Parties.

13.6.1     Except as otherwise provided herein, no Party may assign all or part of its rights and obligations under this Agreement to any third party (through a sale, a capital contribution, a donation or any other transaction, including the sale or contribution of a division ("bedrijfstak" / "branche d'activité") or of a business as a whole ("algemeenheid" / "universalité"), or a merger, spin-off or split-up) without the prior written consent of the other Party.

As long as such consent has not been obtained, the assigning Party shall continue to be liable for all obligations that it intended to assign (without prejudice to any other right or remedy that the other Parties may have for breach of this Clause) and the assignee shall not be entitled to exercise any of the rights under this Agreement.

13.6.2     Subject to the assignment restrictions set out in this Clause 13.6 the provisions of this Agreement shall inure to the benefit of and shall be binding upon the Parties and their respective heirs, successors and assigns.

13.7     Severability / Partial invalidity

13.7.1     If any provision in this Agreement shall be held to be illegal, invalid or unenforceable, in whole or in part, under any applicable law, that provision shall be deemed not to form part of this Agreement, and the legality, validity or enforceability of the remainder of this Agreement shall not be affected.

13.7.2     In such case, each Party shall use its reasonable best efforts to immediately negotiate in good faith a valid replacement provision having a similar economic effect which is as close as possible to that of the invalid, void or unenforceable provision.

The rights and remedies of the Parties shall not be affected by any failure to exercise or delay in exercising any right or remedy or by the giving of any indulgence by any other Party or by anything whatsoever except a specific waiver or release in writing and any such waiver or release shall not prejudice or affect any other rights or remedies of the Parties. No single or partial exercise of any right or remedy shall prevent any further or other exercise thereof or the exercise of any other right or remedy.

This Agreement shall be governed by and construed in accordance with Belgian law.

All disputes arising out of or in connection with this Agreement and which the Parties are unable to settle amicably shall be subject to the exclusive jurisdiction of the courts of Brussels, and the language of the procedure shall be Dutch.

In this Agreement each of the following words and expressions shall have the following meanings:

1.1.1     The Seller is a corporation duly incorporated, organised, validly existing for an indefinite duration and duly registered under Belgian law, is duly qualified to do business in Belgium and is not involved in any (threatening) procedure of bankruptcy, liquidation or receivership.

1.1.2     The Seller has the requisite capacity, power and authority and has taken all action necessary, to execute, deliver and exercise its rights, and perform its obligations under the Agreement and any other document to be executed by the Seller.

1.1.3     The Seller has obtained all applicable governmental, statutory, regulatory or other consents, licences, waivers or exemptions to empower it to enter into and perform its obligations under the Agreement.

The Seller's obligations under the Agreement and any other document to be executed by the Seller in connection with the Agreement are, or when the relevant document is executed will be, valid and enforceable in accordance with their respective terms.

The execution of, and the fulfilment of, compliance and performance by the Seller of its obligations under the Agreement and any other documents to be executed by the Seller pursuant to or in connection with the Agreement will not:

1.3.1     conflict with the deed of incorporation ("oprichtingsakte" / "acte de constitution") or the articles of association of the Seller, or give rise to conflicts or liabilities as a consequence of said execution or performance;

1.3.2     conflict with or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of a benefit under any Transferred Contract, the Transferred Permit or any law to which the Seller is a party or by which the Seller or any of the Transferred Assets or Transferred Liabilities are bound;

1.3.3     require the Seller to obtain any consent or approval of, or give any notice or make any registration with, any Governmental Authority or person which has not been obtained or made at the date hereof both on an unconditional basis and on a basis which cannot be revoked;

1.3.4     constitute a violation of any laws applicable to the Seller; or

1.3.5     result in the creation of any Encumbrance whatsoever upon any of the Transferred Assets.

There is no action, suit, investigation or proceeding pending or to the best of the Seller's knowledge threatened before any court or arbitrator or any governmental authority, agency or official against or affecting the Business, the Transferred Assets or the Transferred Liabilities.

6.1.1     Schedule 6 to the Agreement contains a true and complete list of all Transferred Employees, including a true and complete statement of their names, addresses, duties, duration of their employment contract, possible protected employee status, age, length of service and, taking into account any applicable indexation, their current salary, commissions, remuneration in kind, bonuses, pensions, and any other extra--legal or fringe benefits, including pension entitlements. Save as set forth in Disclosure Schedule 2, there are no other employees employed in the Business than the Transferred Employees.

6.1.2     The Company has disclosed to the Purchaser all material facts and matters relating to all collective agreements, arrangements or other understandings with any trade union, staff association or other body representing the Transferred Employees.

6.2.1     The Seller in relation to each of the Transferred Employees,

6.2.2     All remuneration and moneys to be paid to the Transferred Employees have been calculated and paid in conformity with applicable law. All withholding tax payments due at or prior to the Closing Date have been made by the Seller in due time for the periods of employment of the Transferred Employees up to the Closing Date.

6.2.3     All social security and withholding tax payments have been made in due time for and with regard to all periods of employment of the Transferred Employees and which are due up to the Closing Date. No social security contributions have accrued with respect to or are due by the Seller for the Transferred Employees with regard to all periods of employment up to the Closing Date.

6.3.1     The employment contracts with, or the terms of employment applicable to, any of the Transferred Employees do not contain any express provision regarding notice periods or termination modalities in excess of the requirements under applicable legislation.

6.3.2     There are no persons employed in the Business on the basis of consultancy or similar agreements.

6.4.1     No dispute has arisen within the last 5 years between the Seller and any of the Transferred Employees and there are no present circumstances which are likely to give rise to any such dispute.

6.4.2     There are no complaints pending or threatened against the Seller of whatever nature in relation to any of the Transferred Employees and there is no industrial action or dispute or labour trouble, strike or other event or condition of any similar character threatened or existing or anticipated in respect of or concerning any of the Transferred Employees.