Document:

Orgenesis Inc. - Exhibit 10.1 - Filed by newsfilecorp.com

 

	
	Service Agreement 

      
Confidential 	7.2.1_GFOR_001/03
      
	Exp: end OCT 2016
      
	 Last Print Date: 7/07/2014
11:24:00	Page 1/17
  

 

Service Agreement 

between 

ORGENESIS Sprl 

and 

MASTHERCELL SA 

 

	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 2/17 

THIS AGREEMENT is made 

BETWEEN

	(1) 	
      ORGENESIS SPRL, ("ORGENESIS"), a
      company incorporated in Belgium, as company number 0540 866 555 and whose
      registered office is at 4 Avenue Professeur Henrijean, 4900 Spa,
      Belgium;

	 	 
	(2) 	
      MASTHERCELL SA, ("MASTHERCELL"), a
      company incorporated in Belgium, as company number 0840 843 708 and whose
      registered office is at B-6041 Gosselies (Belgium), rue Adrienne Bolland,
      8;

BACKGROUND: 

Orgenesis SPRL is a fully owned subsidiary of Orgenesis Ltd.,
an Israel based company. 

Orgenesis Ltd. is a development stage company with a novel
therapeutic technology that employs a molecular and cellular approach directed
at converting a patient’s own liver cells into functional insulin producing
cells, as a treatment for diabetes. 

Pancreatic islet cell transplantation is considered the only
available technology. However, it is extremely limited and impractical due to
shortages of donor tissue and unacceptable rejection rates by the patient's
immune system.

Orgenesis believes that converting the diabetic patients own
tissue into insulin-producing cells overcomes the problem of donor shortage and
removes the risk of transplant rejection. 

Orgenesis is looking for a partner to develop its process from
lab scale to clinical scale and to prepare for cGMP manufacturing of lots to be
used for a Phase I/II clinical trial to be initiated in 2015.

MASTHERCELL is a cell therapy dedicated contract development
& manufacturing company located in Gosselies, Belgium. 

  	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 3/17 

NOW THEREFORE, in consideration of the preamble and mutual covenants, the parties hereto have hereby mutually agreed as follows: 

	
1. 		
Definitions

	
	 	 	 
		
1.1. 		
“Affiliates” means any company, corporation, firm, partnership or other entity which is directly or indirectly controlled by, or under common control with any of the parties, where control means the power,
direct or indirect, to direct or cause the direction of the management and policies of such entity, whether by contract, through the by-laws of the aforementioned entities or otherwise.

	
	 	 	 
		
1.2. 		
“Agreement” shall mean this services agreement including its Appendices.

	
	 	 	 
		
1.3. 		
“Appendix(ces)” shall mean an appendix to this Agreement.

	
	 	 	 
		
1.4. 		
“Confidential Information” has the meaning referred to in article 9.

	
	 	 	 
		
1.5. 		
“Consumable(s)” shall mean General Consumable(s) and/or Specific Consumable(s) that enter into the production process as well as is used for quality control purposes. Consumables are all components and
disposables that enter into the execution of the project. These comprise, but are not limited to, cell culture media, cell culture devices, quality control reagents and kits, pipets, tubes, and all small materials necessary to perform the activities
related to the execution of the project.

	
	 	 	 
		
1.6. 		
“Effective Date” shall mean the date referred to in article 14.

	
	 	 	 
		
1.7. 		
“Force Majeure” has the meaning referred to in article 12.

	
	 	 	 
		
1.8. 		
“Good Manufacturing Practice” or “GMP” shall mean practices required with respect to the manufacture of the Products by the provisions of EC Commission Directive 2003/94/CE together with any
implementing applicable legislation and with the Guide to Good Manufacturing Practice published by the EC Commission in 1992 (ISBN 92-82 6-3180-X) as well as with any other legislation, recommendations or guidelines (binding or non-binding) from the
competent authorities in Europe and all applicable rules, regulations, orders and guidance as the same may from time to time be amended.

	
	 	 	 
		
1.9. 		
“Material(s)” means all product produced by MASTHERCELL pursuant to the terms of this Agreement

	
	 	 	 
		
1.10. 		
“ORGENESIS Background Intellectual Property” shall mean all Intellectual Property which is in possession of ORGENESIS prior to the date of the signing of this Agreement (here included – but not limited to
- the Manufacturing Process), or which is developed by ORGENESIS in parallel with this Agreement.

	
	 	 	 
		
1.11. 		
“Intellectual Property Rights” shall mean any and all patents, patent applications, utility models, registered designs, unregistered design rights, know-how, copyright, database rights, trademarks, rights in
respect of confidential information, rights under data exclusivity laws, rights under orphan drug laws or under paediatric laws, property rights in biological or chemical materials, extension of the terms of any such rights (including supplementary
protection certificates), applications for and the right to apply any of the foregoing registered property and rights, and similar or analogous rights in any part of the world.

	
	 	 	 
		
1.12. 		
“JSC” shall mean the joint steering committee referred to in article 2.8

	
	 	 	 
		
1.13. 		
“SUPPLIER” shall mean the supplier of materials

	

  	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 4/17 

	 	1.14. 	“Production Facility(ies)”
      shall mean MASTHERCELL’s R&D facilities at Gosselies, Belgium
      where the development of the process will be carried out. 
	 	 	 
	 	1.15. 	“Project” shall include
      the following, as described more into details in this Agreement See
      Section 3) : 
	 	 	 
	 	1.16. 	“QC” shall mean quality
      control 
	 	 	 
	 	1.17. 	“Results” shall mean any
      data, methods, substances and/or materials produced, developed or
      collected by MASTHERCELL in the course of and relating to the Works
      (whether individually, collectively or jointly with ORGENESIS), including,
      without limitation, the Products as well as any and all reports and
      studies. 
	 	 	 
	 	1.18. 	“Work(s)” shall mean any
      works, services or tasks to be performed by MASTHERCELL under this
      Agreement. 

	2. 	
      General principles governing the performance of the
      Project

	 	 	 
		2.1. 	
      MASTHERCELL shall act as a Contract Development and
      Manufacturing Organization (“CDMO”) for ORGENESIS and shall diligently
      perform, in its Facility, the Project as ordered by ORGENESIS in this
      Agreement and its Appendices.

	 	 	 
		2.2. 	
      MASTHERCELL warrants and undertakes to ORGENESIS
    that:

	 	a. 	
      It will have all necessary authorizations for performing
      all its obligations under the Agreement;

	 	 	 
	 	b. 	
      The Works will be conducted in a professional manner,
      with reasonable professional skill and care;

	 	 	 
	 	c. 	
      It will perform the Project in strict compliance with the
      time schedules set out in Appendix 2.

	 	2.3. 	
      A summary report will be supplied to ORGENESIS after the
      completion of each main part of the Project. The summary reports will be
      sent to ORGENESIS at the latest one (1) month after the completion of each
      part of the Project.

	 	 	 
	 	2.4. 	
      Materials and procedures, background and previous
      experimental data will be made available to MASTHERCELL by ORGENESIS
      and/or SUPPLIER in due time to allow MASTHERCELL to perform the project.
      It is agreed that the biosafety level of the Materials transferred to
      MASTHERCELL will not exceed level 2, as defined in the Directive
      2000/54. ORGENESIS will provide, when applicable, any available
      safety data sheet and/or procedure related to the handling of the
      biological Material transferred to MASTHERCELL together with all
      information that the Belgian Biosafety Authorities might request.
      MASTHERCELL shall ensure that any biological Material shall be handled in
      accordance with the applicable legislation, here included this
      implementing Directive 2000/54/EC of the European Parliament and of the
      Council of 18 September 2000 on the protection of workers from risks
      related to exposure to biological agents at work.

	 	 	 
	 	2.5. 	
      Orgenesis will supply Masthercell with adequate
      recombinant adenovirus stocks that contain functional transgenes. These
      virus banks will have been tested for sterility and their functionality
      will have been demonstrated as driving transdifferentiation of human
      hepatic cells into pancreatic beta-cells before being used by
      Masthercell.

      
        	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

      

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 5/17 

	 	2.6. 	
      ORGENESIS shall retain ownership of the Materials at all
      times. MASTHERCELL shall in no circumstances use the Materials for
      purposes other than the performance of the Work or transfer the Materials
      to any third party. MASTHERCELL will ensure that the Materials are used in
      full compliance with all applicable legislation.

	 	 	 
	 	2.7. 	
      MASTHERCELL undertakes to communicate to ORGENESIS any
      available information or data which would be required in order to file any
      application with the competent authorities, including an application for
      being allowed to carry out preclinical and/or clinical trials.

	 	 	 
	 	2.8. 	
      Promptly after the Effective Date, the Parties will
      establish a joint steering committee (“JSC”) which will be in charge of
      overseeing the Parties’ activities under this Agreement and assessing the
      results of the Works carried out by MASTHERCELL. ORGENESIS and MASTHERCELL
      shall each appoint two (2) members as representatives in the JSC. Each of
      the parties represented in the JSC may replace its representatives at any
      time upon written notice to the other members.

	 	 	 
	 		
      The JSC will meet regularly and in any case at the end of
      each step of the Project. The representative of ORGENESIS will head the
      JSC and, if practicable, will send written notice of all meetings to all
      members of the JSC no less than fifteen (15) days before the date of each
      meeting. With the sole exception of specific items of the meeting minutes
      to which the members cannot agree and which are escalated as provided
      below, definitive minutes of the meetings shall be finalized no later than
      thirty (30) days after the meeting to which the minutes
pertains.

	 	 	 
	 		
      In the event the JSC is unable to reach a unanimous
      decision within fifteen (15) days after it has met, or if there is
      disagreement on the minutes, then either Party may, by written notice to
      the other, have such issue referred to the CEO of MASTHERCELL and the CEO
      of ORGENESIS, for resolution. If they are unable to determine a resolution
      in a timely manner, which shall in no case be more than thirty (30) days
      after the matter was referred to them, either Party may start an
      arbitration procedure as provided in article 14.2.

	 	 	 
	 		
      Notwithstanding the above, MASTHERCELL acknowledges that
      it is to conduct the Project as per the objectives of ORGENESIS, and no
      arbitration is required if ORGENESIS determines in its sole discretion
      that its objectives will not be met through MASTHERCELL’s intended or
      completed actions. In such case, ORGENESIS may terminate this Agreement
      under Article 0.

	3. 	
      Detailed steps of the Project

	 	 	 
		3.1. 	
      MASTHERCELL undertakes to carry out the Project in
      compliance with articles 3.3 to 3.8 provided demonstrated successful
      outcome of the small scale process developed by ORGENESIS and effective
      technology transfer of the process and of the existing analytical methods
      to MASTHERCELL.

	 	 	 
		3.2. 	
      Given the nature of the project, the duration and
      therefore the price given for each section here under are based on the
      assumptions that were used to prepare the Development plan submitted to
      the Walloon Region. If, for a reason not linked to the performance of
      Masthercell staff, the duration is extended, extra costs will be charged
      to Orgenesis.

	 	 	 
		3.3. 	
      Liver Cells sourcing from fresh liver tissue samples 

      Budget : 125,000 Euro

      
        	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

      

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 6/17 

	 	a. 	
      Obtain the authorization in Belgium to use fresh and
      frozen liver tissue sample

	 	 	 
	 		
      The goal is to obtain the authorization in Belgium to use
      fresh human liver tissue samples to develop GMP-compliant transfer of
      starting material, isolation, first culture steps, storage and transport
      of Liver Cells (in the absence of pen-strep)”. A dossier including
      clinical protocol, description of use of Human Corporal Material, Patient
      informed consent will be written and discussed with the Ethical Committee
      of the UCL. As an example, a convention could be signed with UCL (Prof.
      Sokal) in order to obtain the right to retrieve small pieces of donated
      organs that he harvests for the Hepatocyte Bank. Three months will be
      necessary on one hand to obtain approval from the Ethical Committee and on
      the other hand to negotiate sharing donated tissue and finalize a
      Convention with the Research Directorate of the UCL (0,25 FTE QP; few days
      of work for legal review of the contract for ORGENESIS).

	 	 	 
	 	b. 	
      Establish a protocol for harvesting fresh liver cells as
      source for the primary cell culture and banking

       Ideally 5 different donor
        tissues will be tested. 5 to 10 samples of equal or different sizes will
        be sampled from each liver to test stability of starting material and the
        smallest size compatible with full scale process (generation of
        109 cells). In average, five different donor livers can
    be collected over a period of 5 months.

	 	3.4. 	
      Comparison of cell expansion in CS CellBIND10 and
    CF10

	 	 	 
	 		
      Budget : 100,000 Euro

	 	 	 
	 		
      Preliminary tests at ORGENESIS have indicated that Cell
      Factories can support the proliferation of liver derived cells and the
      trans-differentiation process. Until the feasibility of
      transdifferentiation in Xpansion bioreactors is proven, Cell Factory
      systems will be used for cell production. The aim of this task is to
      identify the best cell factory system (CS CellBIND 10 from Corning and
      CF10 from Nunc) for cell proliferation and trans-differentiation. Decision
      to continue or abort development in cell factories will be taken after 6
      month work as preliminary data will be collected in parallel from a first
      series of experiments run in Xpansion 10 bioreactors at ATMI.

	 	 	 
	 		
      At the end of this work, MTC will evaluate all results
      obtained and, together with Orgenesis and ATMI, compare those with the
      results obtained by ATMI in bioreactors (XP10). The selection criteria
      (for the best system) will be defined with the 3 parties. These evaluation
      activities are estimated to take 3 weeks and are budgeted at 10,000€ (for
      MTC part of the work, on top of the 100k€ for the comparison
      activities)

	 	 	 
	 	3.5. 	
      Technology transfer from ATMI to MTC 

      Budget : 30,000 Euro

	 	 	 
	 		
      At the end of process development by ATMI, ATMI will
      perform 3 reproducibility runs in their lab. Masthercell will send some
      people to observe the execution of these runs in order to learn how to
      perform the process at large scale. This will allow to save time for
      technology transfer.

      
        	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

      

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 7/17 

	 	3.6. 	
      Full-scale non-GMP reproducibility and training runs 

      Budget : 250,000 Euro

	 	 	 
	 		
      3 Runs will be produced in the technology transfer lab
      for reproducibility and training. The success of these runs will conclude
      the technology transfer between ATMI and MTC and will be used to train all
      operators who will participate to the later clinical
  manufacturing.

	 	 	 
	 	3.7. 	
      Quality Control assay
development

	 	a. 	
      Final product stability 

    Budget : 75,000 euros

	 	 	 
	 		
      We will test various injectable formulation solutions at
      4°C (or RT) and measure cell viability, metabolic activity and cell
      potency at several time points. Viability should remain higher than 70%.
      As a general rule, metabolic activity and potency at the end of the
      stability phase will be considered sufficient for administration as long
      as they do not fall under 70% of the values achieved with the fresh
      product. Cells from at least three different donors will be tested.
      Finally, two formulation solution candidates will be used for comparison
      on full scale batches generated as reproducibility runs.

	 	 	 
	 	b. 	
      Quality Control on final product

	 	 	 
	 		
      Budget : 275,000 euros

•        Potency assay 

Optimization of the current GSIS and
Insulin ELISA assays will be carried out in order to increase the sensitivity of
the read-out. In addition, the assays have to be made GMP-compliant. They will
be evaluated for their suitability. Positive and negative controls from a secure
and stable source have to be incorporated in the assays. Linearity and
reproducibility (as referred to in the ICH Q2 (R1)) of the assays in the working
range have to be documented. The assay should be optimized using cells
transdifferentiated with the 3 current adenoviruses. Once the assay will be
optimized and controlled, it will be applied to cells transdifferentiated with
the three new humanized viruses.

•        Identity assay 

The identity assay will be based on
RT-PCR assays that are currently used to verify viral transduction efficacy in
addition to an insulin RT-PCR assay. It is essential to develop such an identity
assay in addition to the potency assay that measures the amount of insulin
released in order to verify expression of the exogenous transcription factors.
As a matter of fact cells that have received the three transcription factors
might be immature and not secrete insulin and still be able to
transdifferentiate in vivo thereby contributing to therapeutic efficacy.

  	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 8/17 

To set up these PCR assays, specific
probe and primer sets will be purchased from Applied Biosystems. Total RNA from
positive and negative cells will be purchased as positive and negative controls.
In parallel, a set of reference genes will be assessed in order to select the
two best ones to use in routine assays. The challenge in this assay development
will be to fix acceptance criteria on the expression levels that need to be
reached for each of the assessed mRNAs. This will require to collect a
statistically significant number of data and to acquire a good sense of assay
reproducibility and inter-individual variation.

•        Purity assays 

A cytometry assay will be used as the
principal purity assay to ensure that more than 90% of the cell population has a
mesenchymal phenotype. A relatively straightforward optimization of current
assays with the aim to analyze all markers in one tube with up to 8 colors and
measure viability and metabolic activity at the same time can be performed by
ImmuneHealth (or other partner) for cytometry assays. However, since
transdifferentiation into beta-like cells occurs in approximately 15% of the
total cell population, it will be essential to determine the fate of the other
85% of the cells and these subpopulations will need to be identified and
quantified. We will use the immunofluorescence assays developed while optimizing
the triple viral infection to quantify the subpopulations expressing or
co-expressing the various exogenous transcription factors.

Given the autologous character of the
process and the unknown inter-individual variability, approximately 6 months
will be needed to set up robust standardized assays for targeting the exogenous
transcription factors. Ideally, 3 assays will be designed but limitation might
come from the lack of availability of highly specific antibodies. Six additional
months will be required to make these assays GMP-compliant and to achieve
operator-independent quantification. 

•      
 Safety assays 

Safety assays are the only assays that
are required to be validated for phase I. Validation of sterility assays will be
outsourced. Validation of the assays measuring endotoxin and mycoplasma levels
are done routinely. 

Regulatory advice will be sought to
know if the titration of residual infectious viruses is an assay that requires
validation. This validation has been tentatively scheduled for 4 months after a
phase of tech transfer and GMP adaptations/optimizations.

	 	c. 	
      Genetic stability and potential tumorigenicity of the
      final product in vitro

	 	 	 
	 		
      Budget : 35,000 Euros

	 	 	 
	 		
      Genetic stability of cells maintained in culture for a
      few weeks will need to be confirmed via karyotyping and CGH (comparative
      genomic hybridization).

      
        	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

      

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 9/17 

In addition, at the end of the
process, even if it is expected that 15% of the cells will be fully mature and
post-mitotic, most of the cells present in the final product are still capable
of proliferating. If left in culture, these cells will take over and dilute the
mature cells. Demonstration that the cell product effectively reaches senescence
and stops proliferating will be required.

We plan to perform these assays on the
final product of full scale reproducibility batches. 

	 	3.8. 	
      Project management

	 	 	 
	 		
      During the execution of the project, a project manager
      will be appointed by MASTHERCELL to oversee Orgenesis’ Project. The cost
      for this activity is of 62,500€ as per the final offer made to Orgenesis
      and will be invoiced throughout the execution of the project. This person
      will ensure that the activities agreed with Orgenesis are executed in a
      timely manner, within the allocated budget. He/she will organize regular
      internal project meetings with the different persons working on the
      project and will report progresses to the customer on a regular
    basis.

	 	 	 
	 		
      The project manager will also prepare a final report at
      the end of the project.

	4. 	
      Trained personnel and supervision

	 	 	 
		4.1. 	
      MASTHERCELL’s trained personnel will perform the
      development activities described in this Agreement under the supervision
      of the MASTHERCELL’s Chief Operation Officer.

	 	 	 
		4.2. 	
      ORGENESIS may delegate, from its own personnel and under
      its own responsibility, a specialist to observe/support activities at
      MASTHERCELL. The Parties shall agree upon timing for the visits of
      ORGENESIS specialist at MASTHERCELL. Despite any intervention of the
      ORGENESIS specialist, MASTHERCELL remains in any case the sole responsible
      Party for any activity described in this Agreement.

	 	 	 
		4.3. 	
      MASTHERCELL shall remain responsible for any aspects of
      the employment of its personnel involved in activities carried out for
      ORGENESIS.

	 	 	 
	5. 	
      Compliance with legal
requirements

	 	 	 
		5.1. 	
      It is understood that activities performed by MASTHERCELL
      for the benefit of ORGENESIS will be carried out by MASTHERCELL in
      compliance with the applicable regulations.

	 	 	 
	6. 	
      Price and payment conditions

	 	 	 
		6.1. 	
      The Price of Work are listed in Annex 2 of this
      contract

	 	 	 
		6.2. 	
      Transportation costs are not included in the Price of the
      Work. If ORGENESIS requires MASTHERCELL to organize transportation,
      MASTHERCELL will charge ORGENESIS the transportation costs + 10% for
      administration and handling.

	 	 	 
		6.3. 	
      Outsourced quality control costs are not included in the
      Price of the Work. If they are required, they will be invoiced at their
      cost price, plus 10% for procurement, administration and handling.
      MASTHERCELL will not outsource any quality control without the prior
      consent of ORGENESIS.

      
        	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

      

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 10/17 

	 	6.4. 	
      Consumables are included in the Price of the Work, at the
      exception of disposable bioreactors and their accessories as well as
      serum. They will be invoiced at cost plus 5% for procurement,
      administration and handling.

	 	 	 
	 	6.5. 	
      The price of starting material (fresh or frozen hepatic
      cells or liver biopsies) and its transport and quality/safety testing is
      not included in this offer. These will be invoiced at their cost price,
      plus 10 % for procurement, administration and handling.

	 	 	 
	 	6.6. 	
      The payment of the Price of the Work shall be made
      according to the following timetable:

	 	– 	
      30 % of the Price of the Work (288,750 €, two hundred
      eighty-eight thousands seven hundred and fifty Euros) will be invoiced by
      MASTHERCELL upon (i) the signature of this Agreement and (ii) the official
      approval from the DG06. 

	 	  	     
	 	– 	
      MASTHERCELL shall then send to ORGENESIS, at the end of
      each month, an amount equal to the value of the Works actually performed
      during said month. Each month, and during 22 months, 13,150€ will be
      deducted from the monthly invoice. This amount corresponds to the initial
      payment (288,750€) divided by the amount of months planned for the project
      (22 months). 

	 	6.7. 	
      Invoices are payable within thirty (30) days from the end
      of month that the invoices were received by Orgenesis.

	 	 	 
	 	6.8. 	
      After due notice MASTHERCELL reserves the right to cease
      or suspend Works for which payment remains in arrear and to charge
      interest at the rate of one percent (1 %) per month on all overdue
      payments.

	7. 	
      Liabilities

	 	 	 
		7.1. 	
      MASTHERCELL agrees to indemnify and hold ORGENESIS
      harmless from and against any and all claims, demands, causes of action,
      actions or suits, judgements, decrees, damages or any liability whatsoever
      asserted or entered against ORGENESIS by or on behalf of any person, firm
      corporation or governmental bodies for bodily injury or damage to property
      arising out of or relating to the Products and/or the Project in case such
      damages are due to breach or negligence of MASTHERCELL.

	 	 	 
		7.2. 	
      ORGENESIS agrees to indemnify and hold MASTHERCELL
      harmless from and against any and all claims, demands, causes of action,
      actions or suits, judgements, decrees, damages or any liability whatsoever
      asserted or entered against MASTHERCELL by or on behalf of any person,
      firm corporation or governmental bodies for bodily injury or damage to
      property arising out of or relating to any use by ORGENESIS or other
      parties of any of the Products and/or the Project, in case such damages
      are due to breach or negligence of ORGENESIS.

	 	 	 
		7.3. 	
      In any case, neither Party shall be liable to the other
      for an amount exceeding the Price of the Work, except in case of gross
      negligence or wilful misconduct.

	 	 	 
		7.4. 	
      MASTHERCELL undertakes to be properly covered by an
      appropriate insurance policy for its liabilities under this
    Agreement.

	 	 	 
	8. 	
      Intellectual Property Rights

	 	 	 
		8.1. 	
      MASTHERCELL acknowledges that the Works will be performed
      exclusively based on the Manufacturing Process and other know-how coming
      from or derived from ORGENESIS Background Intellectual
  Property.

  
    	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

  

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 11/17 

	 	8.2. 	
      ORGENESIS Background Intellectual Property is and shall
      remain the exclusive property of ORGENESIS at all times. MASTHERCELL shall
      make no representation or do any act which may be taken to indicate that
      it has any right, title or interest in or to the ownership of the
      ORGENESIS Background Intellectual Property. ORGENESIS shall also retain
      ownership in all improvements and inventions in connection to ORGENESIS
      Background Intellectual Property and shall own any and all Intellectual
      Property Rights in improvements to ORGENESIS Background Intellectual
      Property that may arise during the course of the Work. MASTHERCELL
      acknowledges that nothing contained in this Agreement shall give it any
      right, title or interest in the ORGENESIS Background Intellectual Property
      or any improvements save as granted hereby.

	 	 	 
	 	8.3. 	
      ORGENESIS hereby grants to MASTHERCELL, which accepts, a
      non-exclusive, royalty- free license for use of the ORGENESIS Background
      Intellectual Property for the sole purpose of the performance of
      MASTHERCELL's Works on the Project at the Production Facility, subject to
      the other terms and conditions of this Agreement.

	 	 	 
	 	8.4. 	
      Any materials, including but not limited to all hard
      copies or other assets, including reports, notes, notebooks, summaries,
      tables presentations, graphics, databases, software produced by
      MASTHERCELL for ORGENESIS pursuant to the terms of this Agreement shall be
      the sole and exclusive property of ORGENESIS and MASTHERCELL hereby
      assigns and vests in ORGENESIS the entire rights, title and interest
      thereto.

	 	 	 
	 	8.5. 	
      MASTHERCELL shall promptly disclose to ORGENESIS all
      Results and upon ORGENESIS' request shall execute and deliver any and all
      instruments and documents and make such other acts as may be necessary or
      desirable to document such transfer or to enable ORGENESIS or any third
      Party identified by it, to prepare, apply for, prosecute, enforce and
      maintain patents, trademark registrations, copyrights or other
      Intellectual Property Rights in any jurisdiction with respect to any
      Results or to obtain any extension, validation, reissue, continuance or
      renewal of any such Intellectual Property related thereto. MASTHERCELL
      shall not prepare, file or cause to be prepared or filed, any patent,
      trademark or copyright applications in respect to any Results. ORGENESIS
      or any third party identified by it shall, at its sole discretion,
      prepare, file, prosecute and maintain patent, trademark or copyright
      applications for such Results.

	 	 	 
	 	8.6. 	
      MASTHERCELL warrants that any of its employees having
      access to ORGENESIS Background Intellectual Property: (i) shall be made
      aware of the confidentiality of the same; (ii) shall be bound by
      confidentiality agreements in place in substantially the same terms as the
      provisions in article 9 of this Agreement; (iii) will keep such ORGENESIS
      Background Intellectual Property in strict confidence; and (iv) will not
      disclose same to any third Party.

	9. 	
      Confidentiality

	 	 	 
		9.1. 	
      Each Party hereto understands that the other’s
      relationship with its ORGENESISs, officers and employees is one of
      confidence and that during the period of this Agreement between
      MASTHERCELL and ORGENESIS either Party may receive, or may have already
      received, knowledge of, or access to, information which relates to the
      materials, compounds, compound structures, compound synthesis information,
      technical and non-technical data, market information, sales, business
      plans, strategies, products, processes, specifications, techniques,
      testing procedures, research, developments, inventions, trade secrets, or
      know- how of the other or of its ORGENESISs and which is not known to the
      general public (“Confidential Information”).

      
        	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

      

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 12/17 

	 	9.2. 	
      The Parties are aware that Confidential Information may
      be disclosed in any manner including in writing, orally, electronically,
      or visually. Confidential Information disclosed in writing shall be
      clearly marked as “Confidential” when disclosed. To the extent possible,
      when Confidential Information is disclosed in a manner other than in
      writing, it shall be summarized and reduced to written form, marked
      “Confidential” and transmitted to the receiving party within thirty (30)
      business days of the initial disclosure.

	 	 	 
	 	9.3. 	
      Every information disclosed in the framework of the
      Technology Transfer, as well as every part of ORGENESIS Background
      Intellectual Property, falls automatically into the scope of the
      Confidential Information.

	 	 	 
	 	9.4. 	
      Except as necessary pursuant to the purpose of this
      Agreement, the receiving Party will not at any time, without the prior
      written consent of the disclosing Party, (a) use the Confidential
      Information for any purpose other than the purpose related to this
      Agreement, or (b) disclose any Confidential Information to any other
      person or entity, or (c) use any Confidential Information for the
      receiving Party's own benefit or the benefit of any other person or entity
      or (d) trade in the securities of any Party or its Affiliate while in
      possession of Confidential Information regarding the other
Party.

	 	 	 
	 	9.5. 	
      The foregoing obligations shall not apply to any portion
      of the Confidential Information that the receiving Party can demonstrate
      by documentary evidence: (i) was known to the receiving Party prior to
      receipt from the disclosing Party; (ii) is or lawfully becomes generally
      available to the public; (iii) is lawfully acquired from third parties who
      have a right to disclose such information; (iv) by mutual written
      agreement is released from a confidential status; (v) the receiving Party
      is required by law to release, provided, the disclosing Party is given
      prior written notice of such request to enable the disclosing Party to
      obtain a protective order or take other protective measures to protect its
      information; or (vi) is independently developed by the receiving Party
      without use of the Confidential Information of the other Party .

	 	 	 
	 	9.6. 	
      Confidential Information shall not be used by the
      receiving Party other than for the purpose of the Agreement. The Parties
      shall only disclose Confidential Information to employees who have a
      genuine need to access such information in order to fulfil the Party's
      obligations under this Agreement.

	 	 	 
	 	9.7. 	
      The receiving Party agrees that, at the other Party's
      request, the receiving Party shall forthwith return to the other Party any
      and all parts of the Confidential Information provided in documentary form
      and will return or destroy any copies or other tangible embodiments
      thereof made by the receiving Party; except for one copy that may be
      retained in a secure file for compliance purposes only.

	 	 	 
	 	9.8. 	
      These obligations of confidentiality and non-use are
      valid during the period of this Agreement and for a period of ten (10)
      years following the Effective Date.

	10. 	
      Assignment / Subcontracting

	 	 	 
		10.1. 	
      MASTHERCELL is not allowed to assign or subcontract all
      or part of its obligations under the Agreement without the prior written
      consent of ORGENESIS.

	 	 	 
		10.2. 	
      In any case, MASTHERCELL remains fully liable towards
      ORGENESIS for any activities of any of the
  sub-contractors.

  
    	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

  

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 13/17 

	
11. 		
Duration and termination of the Agreement

	
	 	 	 
		
11.1. 		
This Agreement shall be effective as from the Effective Date and shall remain in full force and effect until completion of the Works by MASTHERCELL.

	
	 	 	 
		
11.2. 		
Any Party shall be entitled to terminate the Agreement anticipatively upon immediate notice to the other Party in the event of material breach by the other Party which has not been remedied within thirty (30) days from receipt by
the defaulting Party of a written notice sent by the claiming Party with respect to such breach.

	
	 	 	 
		
11.3. 		
ORGENESIS may terminate this Agreement at any moment without cause, by sending a three (3) months prior written notice to MASTHERCELL. The termination will have effect at the end of this three (3) months period. ORGENESIS shall
own all Materials, in process materials, compounds and ORGENESIS information delivered to MASTHERCELL or arising under or otherwise resulting from the Works, or for which MASTHERCELL was reimbursed by ORGENESIS.

	
	 	 	 
			
When ORGENESIS terminates this Agreement in accordance with this provision, the Parties shall assess the value of all Works in progress or Works already completed by MASTHERCELL prior to the effective termination date, in
accordance with the invoicing of the Works actually performed and with the budget provided in Appendix 1. MASTHERCELL shall be entitled to moneys due for all such Works carried out until the actual termination date as well as to the reimbursement of
all non-refundable costs and expenses that it has actually incurred before the termination date, provided MASTHERCELL delivers to ORGENESIS all the Materials, information and process description used so that ORGENESIS can continue the Project with
another service provider.

	
	 	 	 
		
11.4. 		
Upon termination of this Agreement, MASTHERCELL shall, in full compliance with the applicable legislation, either destroy unused Materials or return them to ORGENESIS upon ORGENESIS' instructions.

	

	
12. 		
Force Majeure

	
	 	 	 
		
12.1. 		
If any Party hereto is delayed or prohibited from fulfilling its obligation or obligations under this Agreement by reason of fire, war, embargos, unavailability of raw materials, breakdown of or damage to machinery, or equipment,
strike, lock out or other labour dispute, any rule, order or regulation of any governmental authority, domestic or foreign, or any other cause of occurrence beyond the reasonable control of the Party (“Force Majeure”), and, if prompt
written notice of said delay or prohibition shall be given to the other Party, then performance of said obligation or obligations shall be excused for the period of time during which the cause of such delay or prohibition shall continue, provided
that the Party so impeded shall have made reasonable efforts to minimise any such delay.

	
	 	 	 
		
12.2. 		
If the performance by either Party of any of its obligations under this Agreement is prevented or delayed by Force Majeure for a continuous period in excess of thirty (30) working days, the Parties shall enter into bona fide
discussions with a view to alleviating its effects, or to agreeing upon such alternative arrangements as may be fair and reasonable in the circumstances.

	
	 	 	 
			
If the performance by either Party of any of its obligations under this Agreement is prevented or delayed by Force Majeure for sixty (60) days or more, consecutively or cumulatively, in any one year, then the other Party shall in
its discretion have the right to terminate this Agreement forthwith upon written notice.

	

  	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 14/17 

	13. 	
      Applicable law – Jurisdiction

	 	 	 
		13.1. 	
      This Agreement shall be entirely and exclusively
      interpreted and enforced in accordance with the laws of Belgium.

	 	 	 
		13.2. 	
      Any disputes arising out of or in relation with this
      Agreement shall be finally settled under the CEPANI Rules of Arbitration
      by one (1) arbitrator appointed in accordance with those Rules. The seat
      of the arbitration shall be Brussels (Belgium).

	 	 	 
		13.3. 	
      The arbitration shall be conducted in the English
      language.

	 	 	 
	14. 	
      Miscellaneous

	 	 	 
		14.1. 	
      It is understood and agreed between the Parties that no
      failure or delay by a Party in exercising any right, power or privilege
      hereunder shall operate as a waiver thereof, nor shall any single or
      partial exercise thereof preclude any other or further exercise thereof or
      the exercise of any other right, power or privilege hereunder.

	 	 	 
		14.2. 	
      All notices which are required to be given under this
      Agreement shall be deemed to have been sufficiently given if in writing
      and sent by registered mail or express courier with the requisite postage
      affixed, or if by fax, confirmed by registered mail or expressed courier
      addressed to the Party notified, at the address set forth in the head of
      this Agreement, or such other address as may hereinafter be given by such
      Party to the other for notice purpose. The date of such mailing or
      delivery shall be the date of service of such
notice.

For ORGENESIS:

[To the attention of Jacob BenArie,
CEO 

Orgenesis SPRL 

Avenue Professeur Henrijean, 4 

4900 Spa ] 

For MASTHERCELL: 

[To the attention of Hugues Bultot CEO

MASTHERCELL SA 

Avenue Auguste Piccard, 48 

6041 Gosselies ] 

	 	14.3. 	
      This Agreement together with the Appendices thereto which
      form an integral part thereof supersedes any previous understandings and
      constitutes the entire agreement between the Parties hereto relating to
      the subject matter hereof. Any amendments, modifications, variations, or
      waivers, including amendments and modifications to the Appendices, must be
      in writing and signed by both Parties hereto. In case of contradiction
      between the provisions of the Appendices and of these of this Agreement,
      the provisions of this Agreement will prevail.

	 	 	 
	 	14.4. 	
      If any provisions of this Agreement shall be held by a
      court of competent jurisdiction to be illegal, invalid or unenforceable,
      the remaining provisions shall remain in full force and effect. In such
      event, such provision will be changed and interpreted so as to best
      accomplish the objectives of such unenforceable or invalid provision
      within the limits of applicable law or applicable court
  decisions.

  
    	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

  

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 15/17 

	 	14.5. 	
      This Agreement shall not be construed to make either
      Party a legal representative of the other Party or to give either Party
      any right or power to bind the other Party to any contract or the
      performance of any obligation to or with any third Party.

	 	 	 
	 	14.6. 	
      Each Party shall conduct its operations as an independent
      contractor and no claims for taxes of any kind, nor claims arising out of
      labour laws, nor any other claims asserted against one Party may be
      asserted against the other as a consequence of this Agreement.

	 	 	 
	 		
      Made on June 23rd, 2014 in two original
      copies, each Party acknowledging having received one
  original.

	For and on behalf of MASTHERCELL: 	For and on behalf of
      ORGENESIS: 
	  	  
	Hugues Bultot 	Jacob BenArie 
	Print name 	Print name 
	  	  
	CEO 	CEO 
	Title 	Title 
	/s/ Hugues Bullot 	/s/ Jacob BenArie 
	............................................................... 	......................................................... 
	Signed July 3, 2014 	Signed July 3. 2014 

    
      	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

    

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 16/17 

APPENDIX 1 – PRICE OF WORK

Prices (ex-VAT) are given below for the individual stages of
the program at Masthercell.

	               
                         
         Activity 	Section 	Expected duration 	Total 
	Initiation activities 	See notes 	1 week 	15.000€ 
	Liver cell sourcing 	3.1 	15 months 	125.000 € 
	Comparison of cell expansion systems 	3.3 	5 months 	110.000 € 
	Tech transfer from ATMI 	3.4 	6 months 	30.000 € 
	Reproducibility and training runs 	3.5 	6 months 	250.000 € 
	Quality control assay development 	3.6 	17 months 	385.000 € 
	Project Management 	3.7 	Along the project 	62.500 € 
	  	  	 	 
	Total 	  	 	977.500 €
  

NOTES :

	1. 	
      Initiation activities at Orgenesis in Israel :

		
      Two persons from Masthercell will visit the lab and
      gather all available data/documents/procedures...

      During this visit
        Masthercell will also participate (observation and hands-on when possible)
    to process and QC experiments.

    
		
      The travel costs and reasonable out of pocket expenses
      will be invoiced to Orgenesis.

	2. 	
      These prices include the operator fees, overhead,
      documentation, project coordination, reports, internal meetings, regular
      conference calls with Orgenesis.

	3. 	
      The deliveries are quoted ex-works; the transport and
      related insurance will be paid by the customer but if requested can be
      organized by Masthercell.

	4. 	
      Transport and outsourced testing will be charged at cost
      plus 10% for procurement, administration and handling.

	5. 	
      These prices also include raw materials, consumables and
      disposables, at the exception of single use bioreactors and serum (these
      will be charged at cost plus 5% for procurement, administration and
      handling).

If regulatory support is required by our responsible
Pharmacist, Masthercell would charge this activity at an hourly rate of 150€
excl. VAT.

  	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013 

  	

          	Service Agreement 

          

      Confidential 	7.2.1_GFOR_001/03 
	Exp: end OCT 2016 
	 Last Print Date: 7/07/2014
        11:24:00	Page 17/17 

APPENDIX 2 – PROJECT OVERALL TIMELINES (IN
MONTHS)

 

  	   6.1.2_GFOR_002/04 	Drafting 	   Verification   	Approval 	Effective date 
	Initials + Dpt training 	SVE [ ] 	EMA [ ] 	PST [ ] 	NA [ ] 	 NA [ ]  	NA [ ]	NA [ ] 	NA [ ] 	SVE [ ] 	08 OCT 2013Crailar Technologies Inc.: Exhibit 4.10 - Filed by newsfilecorp.com

 

WARRANT CERTIFICATE

THE WARRANTS REPRESENTED HEREBY WILL BE VOID AND OF NO VALUE
AFTER 5:00 PM (VANCOUVER TIME) ON ________ , 2016. 

WARRANT TO PURCHASE 
COMMON SHARES
OF CRAILAR TECHNOLOGIES INC. 

	Warrant Certificate Number: 2014-____________ 	Number of Warrants: 
  _________________

                    
THIS IS TO CERTIFY THAT for value received, _________ of
________________ (the “Warrantholder”) has the right to purchase
in respect of each warrant (the “Warrants”) represented by this
certificate or by a replacement certificate (in either case this “Warrant
Certificate”), at any time up to 5:00 p.m. (Vancouver time) on __________,
2016 (the “Expiry Time”) _____fully paid and non-assessable common share
(the “Common Shares” and which term shall include any shares or other
securities to be issued in addition thereto or in substitution or replacement
therefor as provided herein) of Crailar Technologies Inc. (the
“Corporation”), a corporation incorporated under the Business
Corporations Act (British Columbia), as constituted on the date hereof, at
an exercise purchase price (the purchase price in effect from time to time being
called the “Exercise Price”) of US$____________per Common Share if
exercised on or before on ____________, 2016, subject to adjustment as provided
herein. 

                    
The Corporation agrees that the Common Shares purchased pursuant to the exercise
of the Warrants shall be and be deemed to be issued to the Warrantholder as of
the close of business on the date on which this Warrant Certificate shall have
been surrendered and payment made for such Common Shares as aforesaid. 

                    
Nothing contained herein shall confer any right upon the Warrantholder to
subscribe for or purchase any Common Shares at any time after the Expiry Time
and from and after the Expiry Time the Warrants and all rights under this
Warrant Certificate shall be void and of no value. 

                    
The above provisions are subject to the following: 

1.                
 Exercise 

1.1              
In the event that the Warrantholder desires to exercise the right to purchase
Common Shares conferred hereby, the Warrantholder shall (a) surrender this
Warrant Certificate to the Corporation in accordance with section 9 hereof, (b)
complete and execute a subscription form in the form attached as Schedule A to
this Warrant Certificate, and (c) pay the amount payable on the exercise of this Warrant in respect of the
Common Shares subscribed for either by bank draft or cheque payable to the
Corporation. Upon such surrender and payment as aforesaid, the Warrantholder
shall be deemed for all purposes to be the holder of record of the number of
Common Shares to be so issued and the Warrantholder shall be entitled to
delivery of a certificate or certificates representing such Common Shares and
the Corporation shall cause such certificate or certificates to be delivered to
the Warrantholder at the address specified in the subscription form within five
business days after such surrender and payment as aforesaid. No fractional
Common Shares will be issuable upon any exercise of this Warrant and the
Warrantholder will not be entitled to any cash payment or compensation in lieu
of a fractional Common Share. 

- 2 - 

2.                 Partial
Exercise 

2.1              
The Warrantholder may from time to time subscribe for and purchase any lesser
number of Common Shares than the number of Common Shares expressed in this
Warrant Certificate. In the event that the Warrantholder subscribes for and
purchases any such lesser number of Common Shares prior to the Expiry Time, the
Warrantholder shall be entitled to receive a replacement certificate
representing the unexercised balance of the Warrants. 

3.                
 Not a Shareholder 

3.1              
The holding of the Warrants shall not constitute the Warrantholder a shareholder
of the Corporation nor entitle the Warrantholder to any right or interest in
respect thereof except as expressly provided in this Warrant Certificate. 

4.                 
Covenants and Representations 

4.1              
The Corporation hereby represents and warrants that it is authorized to issue
and that it will cause the Common Shares from time to time subscribed for and
purchased in the manner provided in this Warrant Certificate and the certificate
representing such Common Shares to be issued and that, at all times prior to the
Expiry Time, it will reserve and there will remain unissued a sufficient number
of Common Shares to satisfy the right of purchase provided in this Warrant
Certificate. The Common Shares (including the shares to be issued upon exercise
of the Warrants) are listed on the TSX Venture Exchange and trade on the OTCQB
tier of the OTC Markets Group, Inc. The Corporation hereby further covenants and
agrees that it will at its expense expeditiously use its best efforts to obtain
the listing of such Common Shares (subject to issue or notice of issue) on each
stock exchange or over-the-counter market on which the Common Shares may be
listed from time to time. All Common Shares which are issued upon the exercise
of the right of purchase provided in this Warrant Certificate, upon payment
therefor of the amount at which such Common Shares may be purchased pursuant to
the provisions of this Warrant Certificate, shall be and be deemed to be fully
paid and non-assessable shares and free from all taxes, liens and charges with
respect to the issue thereof. The Corporation hereby represents and warrants
that this Warrant Certificate is a valid and enforceable obligation of the
Corporation, enforceable in accordance with the provisions of this Warrant
Certificate. The Corporation hereby further covenants and agrees that it shall
make all requisite filings under the securities laws of the United States of
America and each Province of Canada and the respective regulations made
thereunder including those necessary to remain a reporting issuer not in default of any requirement of such acts
and regulations. The Corporation hereby represents and warrants that it will at
all times prior to the Expiry Time of any Warrants hereunder maintain its
existence, will carry on and conduct its business in a prudent manner in
accordance with industry standards and good business practice, and will keep or
cause to be kept proper books of account in accordance with applicable law. 

- 3 - 

5.                 
Anti-Dilution Protection: 

5.1               
 Definitions: For the purposes of this section 5, unless there is
something in the subject matter or context inconsistent therewith, the words and
terms defined below shall have the respective meanings specified therefor in
this subsection 5.1: 

	 	(a) 	
      “Adjustment Period” means the period commencing on
      
__________
, 2014 and ending at the Expiry Time;

	 	 	 
	 	(b) 	
      “Current Market Price” of the Common Shares at any
      date means the price per share equal to the weighted average price at
      which the Common Shares have traded on the TSX Venture Exchange or, if the
      Common Shares are not then listed on the TSX Venture Exchange, on such
      other Canadian stock exchange as may be selected by the directors of the
      Corporation for such purpose or, if the Common Shares are not then listed
      on any Canadian stock exchange, in the over-the- counter market, during
      the period of any 20 consecutive trading days ending not more than five
      business days before such date; provided that the weighted average price
      shall be determined by dividing the aggregate sale price of all Common
      Shares sold on the said exchange or market, as the case may be, during
      such 20 consecutive trading days by the total number of Common Shares so
      sold; and provided further that if the Common Shares are not then listed
      on any Canadian stock exchange or traded in the over-the-counter market,
      then the Current Market Price shall be determined by such firm of
      independent chartered accountants as may be selected by the directors of
      the Corporation;

	 	 	 
	 	(c) 	
      “director” means a director of the Corporation for
      the time being and, unless otherwise specified herein, a reference to
      action “by the directors” means action by the directors of the Corporation
      as a board or, whenever empowered, action by any committee of the
      directors of the Corporation; and

	 	 	 
	 	(d) 	
      “trading day” with respect to a stock exchange or
      over-the-counter market means a day on which such stock exchange or market
      is open for business.

5.2                 Adjustments:
The Exercise Price and the number of Common Shares issuable to the Warrantholder
pursuant to this Warrant Certificate shall be subject to adjustment from time to
time in the events and in the manner provided as follows: 

	 	(a) 	
      If at any time during the Adjustment Period the
      Corporation shall:

- 4 - 

	 	(i) 	
      fix a record date for the issue of, or issue, Common
      Shares to the holders of all or substantially all of the outstanding
      Common Shares by way of a stock dividend;

	 	 	 
	 	(ii) 	
      fix a record date for the distribution to, or make a
      distribution to, the holders of all or substantially all of the
      outstanding Common Shares payable in Common Shares or securities
      exchangeable for or convertible into Common Shares;

	 	 	 
	 	(iii) 	
      subdivide the outstanding Common Shares into a greater
      number of Common Shares; or

	 	 	 
	 	(iv) 	
      consolidate the outstanding Common Shares into a lesser
      number of Common Shares;

(any of such events in subclauses
5.2(a)(i), 5.2(a)(ii), 5.2(a)(iii) and 5.2(a)(iv) above being herein called a
“Common Share Reorganization”), the Exercise Price shall be adjusted on
the earlier of the record date on which holders of Common Shares are determined
for the purposes of the Common Share Reorganization and the effective date of
the Common Share Reorganization to the amount determined by multiplying the
Exercise Price in effect immediately prior to such record date or effective
date, as the case may be, by a fraction: 

	 	(A) 	
      the numerator of which shall be the number of Common
      Shares outstanding on such record date or effective date, as the case may
      be, before giving effect to such Common Share Reorganization;
and

	 	 	 
	 	(B) 	
      the denominator of which shall be the number of Common
      Shares which will be outstanding immediately after giving effect to such
      Common Share Reorganization (including in the case of a distribution of
      securities exchangeable for or convertible into Common Shares the number
      of Common Shares that would have been outstanding had such securities been
      exchanged for or converted into Common Shares on such
  date).

To the extent that any adjustment in
the Exercise Price occurs pursuant to this clause 5.2(a) as a result of the
fixing by the Corporation of a record date for the distribution of securities
exchangeable for or convertible into Common Shares, the Exercise Price shall be
readjusted immediately after the expiry of any relevant exchange or conversion
right to the Exercise Price which would then be in effect based upon the number
of Common Shares actually issued and remaining issuable after such expiry and
shall be further readjusted in such manner upon the expiry of any further such
right. If the Warrantholder has not exercised its right to subscribe for and
purchase Common Shares on or prior to the record date of such stock dividend or
distribution or the effective date of such subdivision or consolidation, as the
case may be, upon the exercise of such right thereafter shall be entitled to receive and shall accept in lieu of the
      number of Common Shares then subscribed for and purchased by the
      Warrantholder, at the Exercise Price determined in accordance with this
      clause 5.2(a) the aggregate number of Common Shares that the Warrantholder
      would have been entitled to receive as a result of such Common Share
      Reorganization, if, on such record date or effective date, as the case may
      be, the Warrantholder had been the holder of record of the number of
Common Shares so subscribed for and purchased.

- 5 - 

	 	(b) 	
      If at any time during the Adjustment Period the
      Corporation shall fix a record date for the issue or distribution to the
      holders of all or substantially all of the outstanding Common Shares of
      rights, options or warrants pursuant to which such holders are entitled,
      during a period expiring not more than 45 days after the record date for
      such issue (such period being the “Rights Period”), to subscribe
      for or purchase Common Shares or securities exchangeable for or
      convertible into Common Shares at a price per share to the holder (or in
      the case of securities exchangeable for or convertible into Common Shares,
      at an exchange or conversion price per share) at the date of issue of such
      securities of less than 95% of the Current Market Price of the Common
      Shares on such record date (any of such events being called a “Rights
      Offering”), the Exercise Price shall be adjusted effective immediately
      after the record date for such Rights Offering to the amount determined by
      multiplying the Exercise Price in effect on such record date by a
      fraction:

	 	(i) 	
      the numerator of which shall be the aggregate
  of:

	 	 	 	 
	 		(A) 	
      the number of Common Shares outstanding on the record
      date for the Rights Offering; and

	 	 	 	 
	 		(B) 	
      the quotient determined by
dividing:

	 	(I) 	
      either (a) the product of the number of Common Shares
      offered during the Rights Period pursuant to the Rights Offering and the
      price at which such Common Shares are offered, or, (b) the product of the
      exchange, exercise or conversion price of the securities so offered and
      the number of Common Shares for or into which the securities offered
      pursuant to the Rights Offering may be exchanged, exercised or converted,
      as the case may be; by

	 	 	 
	 	(II) 	
      the Current Market Price of the Common Shares as of the
      record date for the Rights Offering; and

	 	(ii) 	
      the denominator of which shall be the aggregate of the
      number of Common Shares outstanding on such record date and the number of
      Common Shares offered pursuant to the Rights Offering (including in the
      case of the issue or distribution of securities exchangeable or
exercisable for or convertible into Common Shares the number of Common Shares into which such securities may be exchanged, exercised or converted). 

- 6 - 

	 		
      If by the terms of the rights, options, or warrants
      referred to in this clause 5.2(b), there is more than one purchase,
      conversion or exchange price per Common Share, the aggregate price of the
      total number of additional Common Shares offered for subscription or
      purchase, or the aggregate conversion or exchange price of the convertible
      or exchangeable securities so offered, shall be calculated for purposes of
      the adjustment on the basis of the lowest purchase, conversion or exchange
      price per Common Share, as the case may be. Any Common Shares owned by or
      held for the account of the Corporation shall be deemed not to be
      outstanding for the purpose of any such calculation. To the extent that
      any adjustment in the Exercise Price occurs pursuant to this clause 5.2(b)
      as a result of the fixing by the Corporation of a record date for the
      issue or distribution of rights, options or warrants referred to in this
      clause 5.2(b), the Exercise Price shall be readjusted immediately after
      the expiry of any relevant exchange, conversion or exercise right to the
      Exercise Price which would then be in effect based upon the number of
      Common Shares actually issued and remaining issuable after such expiry and
      shall be further readjusted in such manner upon the expiry of any further
      such right.

	 	 	 
	 	(c) 	
      If at any time during the Adjustment Period the
      Corporation shall fix a record date for the issue or distribution to the
      holders of all or substantially all of the Common Shares
  of:

	 	(i) 	
      shares of the Corporation of any class other than Common
      Shares;

	 	 	 
	 	(ii) 	
      rights, options or warrants to acquire Common Shares or
      securities exchangeable or exercisable for or convertible into Common
      Shares (other than rights, options or warrants pursuant to which holders
      of Common Shares are entitled, during a period expiring not more than 45
      days after the record date for such issue, to subscribe for or purchase
      Common Shares or securities exchangeable for or convertible into Common
      Shares at a price per share (or in the case of securities exchangeable or
      exercisable for or convertible into Common Shares at an exchange, exercise
      or conversion price per share on the record date for the issue of such
      securities) of at least 95% of the Current Market Price of the Common
      Shares on such record date);

	 	 	 
	 	(iii) 	
      evidences of indebtedness of the Corporation;
or

	 	 	 
	 	(iv) 	
      any property or assets of the
  Corporation;

and if such issue or distribution does
not constitute a Common Share Reorganization or a Rights Offering (any of such
non-excluded events being herein called a “Special Distribution”), the
Exercise Price shall be adjusted effective immediately after the record date for
the Special Distribution to the amount determined by multiplying the Exercise Price in effect on the record date for the Special Distribution by a fraction: 

- 7 - 

	 	(A) 	
      the numerator of which shall be the difference
      between:

	 	 	 	 
	 		(I) 	
      the product of the number of Common Shares outstanding on
      such record date and the Current Market Price of the Common Shares on such
      record date; and

	 	 	 	 
	 		(II) 	
      the fair value, as determined by a recognized independent
      firm of valuators, to the holders of Common Shares of the shares, rights,
      options, warrants, evidences of indebtedness or property or assets to be
      issued or distributed in the Special Distribution; and

	 	 	 	 
	 	(B) 	
      the denominator of which shall be the product obtained by
      multiplying the number of Common Shares outstanding on such record date by
      the Current Market Price of the Common Shares on such record
  date.

	 		
      Any Common Shares owned by or held for the account of the
      Corporation shall be deemed not to be outstanding for the purpose of such
      calculation. To the extent that any adjustment in the Exercise Price
      occurs pursuant to this clause 5.2(c) as a result of the fixing by the
      Corporation of a record date for the issue or distribution of rights,
      options or warrants to acquire Common Shares or securities exchangeable or
      exercisable for or convertible into Common Shares referred to in this
      clause 5.2(c), the Exercise Price shall be readjusted immediately after
      the expiry of any relevant exchange, exercise or conversion right to the
      amount which would then be in effect if the current market value of the
      Common Shares had been determined on the basis of the number of Common
      Shares issued and remaining issuable immediately after such expiry, and
      shall be further readjusted in such manner upon the expiry of any further
      such right.

	 	 	 	 
	 	(d) 	
      If at any time during the Adjustment Period there shall
      occur:

	 	 	 	 
	 		(i) 	
      a reclassification or redesignation of the Common Shares,
      any change of the Common Shares into other shares or securities or any
      other capital reorganization involving the Common Shares other than a
      Common Share Reorganization;

	 	 	 	 
	 		(ii) 	
      a consolidation, amalgamation or merger of the
      Corporation with or into any other body corporate which results in a
      reclassification or redesignation of the Common Shares or a change of the
      Common Shares into other shares or securities; or

	 	 	 	 
	 		(iii) 	
      the transfer of the undertaking or assets of the
      Corporation as an entirety or substantially as an entirety to another
corporation or entity; (any of such events being herein called a "Capital Reorganization"), after the effective date of the Capital Reorganization: 

- 8 - 

	 	(iv) 	
      the Warrantholder shall be entitled to receive, and shall
      accept, for the same aggregate consideration, upon exercise of this
      Warrant, in lieu of the number of Common Shares which the Warrantholder
      was theretofore entitled to purchase or receive upon the exercise of this
      Warrant, the kind and aggregate number of shares and other securities or
      property resulting from the Capital Reorganization which the Warrantholder
      would have been entitled to receive as a result of the Capital
      Reorganization if, on the effective date thereof, the Warrantholder had
      been the registered holder of the number of Common Shares to which the
      Warrantholder was theretofore entitled to purchase or receive upon the
      exercise of this Warrant; and

	 	 	 
	 	(v) 	
      the Exercise Price shall, on the effective date of the
      Capital Reorganization, be adjusted by multiplying the Exercise Price in
      effect immediately prior to such Capital Reorganization by the number of
      Common Shares purchasable pursuant to this Warrant Certificate immediately
      prior to the Capital Reorganization, and dividing the product thereof by
      the number of successor securities determined in Section 5.2(d)(iv)
      above.

	 	(e) 	
      If necessary, as a result of any Capital Reorganization,
      appropriate adjustments shall be made in the application of the provisions
      of this Warrant Certificate with respect to the rights and interest
      thereafter of the Warrantholder to the end that the provisions of this
      Warrant Certificate shall thereafter correspondingly be made applicable as
      nearly as may reasonably be possible in relation to any shares or other
      securities or property thereafter deliverable upon the exercise of this
      Warrant.

	 	 	 
	 	(f) 	
      If at any time during the Adjustment Period any
      adjustment or readjustment in the Exercise Price shall occur pursuant to
      the provisions of clauses 5.2(a), 5.2(b) or 5.2(c) hereof, then the number
      of Common Shares purchasable upon the subsequent exercise of this Warrant
      shall be simultaneously adjusted or readjusted, as the case may be, by
      multiplying the number of Common Shares purchasable upon the exercise of
      this Warrant immediately prior to such adjustment or readjustment by a
      fraction which shall be the reciprocal of the fraction used in the
      adjustment or readjustment of the Exercise Price.

5.3       
            Rules:
The following rules and procedures shall be applicable to adjustments made
pursuant to subsection 5.2 hereof. 

	 	(a) 	
      Subject to the following provisions of this subsection
      5.3, any adjustment made pursuant to subsection 5.2 hereof shall be made
      successively whenever an event referred to therein shall
  occur.

- 9 - 

	 	(b) 	
      No adjustment in the Exercise Price shall be required
      unless such adjustment would result in a change of at least one per cent
      in the then Exercise Price and no adjustment shall be made in the number
      of Common Shares purchasable or issuable on the exercise of this Warrant
      unless it would result in a change of at least one one-hundredth of a
      Common Share; provided, however, that any adjustments which except for the
      provision of this clause 5.3(b) would otherwise have been required to be
      made shall be carried forward and taken into account in any subsequent
      adjustment. Notwithstanding any other provision of subsection 5.2 hereof,
      no adjustment of the Exercise Price shall be made which would result in an
      increase in the Exercise Price or a decrease in the number of Common
      Shares issuable upon the exercise of this Warrant (except in respect of
      the Common Share Reorganization described in subclause 5.2(a)(iv) hereof
      or a Capital Reorganization described in subclause 5.2(d)(ii)
    hereof).

	 	 	 
	 	(c) 	
      No adjustment in the Exercise Price or in the number or
      kind of securities purchasable upon the exercise of this Warrant shall be
      made in respect of any event described in section 5 hereof if the
      Warrantholder is entitled to participate in such event on the same terms
      mutatis mutandis as if the Warrantholder had exercised this Warrant prior
      to or on the record date or effective date, as the case may be, of such
      event.

	 	 	 
	 	(d) 	
      No adjustment in the Exercise Price or in the number of
      Common Shares purchasable upon the exercise of this Warrant shall be made
      pursuant to subsection 5.2 hereof in respect of the issue from time to
      time of Common Shares pursuant to this Warrant Certificate or pursuant to
      any stock option, stock purchase or stock bonus plan in effect from time
      to time for directors, officers or employees of the Corporation and/or any
      subsidiary of the Corporation and any such issue, and any grant of options
      in connection therewith, shall be deemed not to be a Common Share
      Reorganization, a Rights Offering nor any other event described in
      subsection 5.2 hereof.

	 	 	 
	 	(e) 	
      If at any time during the Adjustment Period the
      Corporation shall take any action affecting the Common Shares, other than
      an action described in subsection 5.2 hereof, which in the opinion of the
      directors would have a material adverse effect upon the rights of the
      Warrantholder, either or both the Exercise Price and the number of Common
      Shares purchasable upon exercise of this Warrant shall be adjusted in such
      manner and at such time by action by the directors, in their sole
      discretion, as may be equitable in the circumstances. Failure of the
      taking of action by the directors so as to provide for an adjustment prior
      to the effective date of any action by the Corporation affecting the
      Common Shares shall be deemed to be conclusive evidence that the directors
      have determined that it is equitable to make no adjustment in the
      circumstances.

	 	 	 
	 	(f) 	
      If the Corporation shall set a record date to determine
      holders of Common Shares for the purpose of entitling such holders to
      receive any dividend or distribution or any subscription or purchase
      rights and shall, thereafter and before the distribution to such holders of any such dividend,
      distribution or subscription or purchase rights, legally abandon its plan
      to payor deliver such dividend, distribution or subscription or purchase
      rights, then no adjustment in the Exercise Price or the number of Common
      Shares purchasable upon exercise of this Warrant shall be required by
  reason of the setting of such record date.

- 10 - 

	 	(g) 	
      In any case in which this Warrant shall require that an
      adjustment shall become effective immediately after a record date for an
      event referred to in subsection 5.2 hereof, the Corporation may defer,
      until the occurrence of such event:

	 	 	 	 
	 		(i) 	
      issuing to the Warrantholder, to the extent that this
      Warrant is exercised after such record date and before the occurrence of
      such event, the additional Common Shares issuable upon such exercise by
      reason of the adjustment required by such event; and

	 	 	 	 
	 		(ii) 	
      delivering to the Warrantholder any distribution declared
      with respect to such additional Common Shares after such record date and
      before such event;

	 		
      provided, however, that the Corporation shall deliver to
      the Warrantholder an appropriate instrument evidencing the right of the
      Warrantholder, upon the occurrence of the event requiring the adjustment,
      to an adjustment in the Exercise Price and the number of Common Shares
      purchasable upon the exercise of this Warrant and to such distribution
      declared with respect to any such additional Common Shares issuable on
      this exercise of this Warrant.

	 	 	 
	 	(h) 	
      In the absence of a resolution of the directors fixing a
      record date for a Rights Offering, the Corporation shall be deemed to have
      fixed as the record date therefor the date of the issue of the rights,
      options or warrants issued pursuant to the Rights Offering.

	 	 	 
	 	(i) 	
      If a dispute shall at any time arise with respect to
      adjustments of the Exercise Price or the number of Common Shares
      purchasable upon the exercise of this Warrant, such disputes shall be
      conclusively determined by the auditors of the Corporation or if they are
      unable or unwilling to act, by such other firm of independent chartered
      accountants as may be selected by the directors and any such determination
      shall be conclusive evidence of the correctness of any adjustment made
      pursuant to subsection 5.2 hereof and shall be binding upon the
      Corporation and the Warrantholder.

	 	 	 
	 	(j) 	
      As a condition precedent to the taking of any action
      which would require an adjustment pursuant to subsection 5.2 hereof,
      including the Exercise Price and the number or class of Common Shares or
      other securities which are to be received upon the exercise thereof, the
      Corporation shall take any action which may, in the opinion of counsel to
      the Corporation, be necessary in order that the Corporation may validly
      and legally issue as fully paid and non-assessable shares all of
  the Common Shares or other securities which the Warrantholder is entitled to receive in accordance with the provisions of this Warrant Certificate. 

- 11 - 

5.4               
 Notice: At least 21 days prior to any record date or effective
date, as the case may be, for any event which requires or might require an
adjustment in any of the rights of the Warrantholder under this Warrant,
including the Exercise Price and ‘the number of Common Shares which are
purchasable under this Warrant, the Corporation shall deliver to the
Warrantholder a certificate of the Corporation specifying the particulars of
such event and, if determinable, the required adjustment and the calculation of
such adjustment. In case any adjustment for which a notice in this subsection
5.4 has been given is not then determinable, the Corporation shall promptly
after such adjustment is determinable deliver to the Warrantholder a certificate
providing the calculation of such adjustment. The Corporation hereby covenants
and agrees that the register of transfers and transfer books for the Common
Shares will be open, and that the Corporation will not take any action which
might deprive the Warrantholder of the opportunity of exercising the rights of
subscription contained in this Warrant Certificate, during such 21 day period.

6.                    Further
Assurances

                       The
Corporation hereby covenants and agrees that it will do, execute, acknowledge
and deliver, or cause to be done, executed, acknowledged and delivered, all and
every such other act, deed and assurance as the Warrantholder shall reasonably
require for the better accomplishing and effectuating of the intentions and
provisions of this Warrant Certificate. 

7.                  
 Time of Essence 

                      
Time is of the essence of this Warrant Certificate. 

8.                  
 Governing Laws 

                      
This Warrant Certificate shall be governed by, and construed in accordance with,
the laws of the State of California, without reference to the choice of law
provisions thereof.

9.                   
Notices 

                      
All notices or other communications to be given under this Warrant Certificate
shall be delivered by hand or by telecopier and, if delivered by hand, shall be
deemed to have been given on the delivery date and, if sent by telecopier, on
the date of transmission if sent before 4:00 p.m. on a business day or, if such
day is not a business day, on the first business day following the date of
transmission. 

- 12 - 

                      
Notices to the Corporation shall be addressed to: 

Crailar Technologies Inc. 
305 -
4420 Chatterton Way, Victoria, British Columbia, V8X 5J2 
Attention: Guy
Prevost, Controller 
Fax Number: (250) 658-8586. 

                      
The Corporation or the Warrantholder may change its address for service by
notice in writing to the other of them specifying its new address for service
under this Warrant Certificate. 

10.               
 Lost Certificate 

10.1              
If this Warrant Certificate or any replacement hereof becomes stolen, lost,
mutilated or destroyed, the Corporation shall, on such terms as it may in its
discretion impose, acting reasonably, issue and deliver a new certificate, in
form identical hereto but with appropriate changes, representing any unexercised
portion of the subscription rights represented hereby to replace the certificate
so stolen, lost, mutilated or destroyed. 

11.                
Language 

                      
The parties hereto acknowledge and confirm that they have requested that this
Warrant Certificate as well as all notices and other documents contemplated
hereby be drawn up in the English language. Les parties aux présentes
reconnaissent et confirment qu’elles ont exigé que la présente convention ainsi
que tous les avis et documents qui s’y rattachent soient rédigés dans la langue
anglaise. 

12.                
Transfer 

12.1              
The Warrants are transferable and the term “Warrantholder” shall mean and
include any successor, transferee or assignee of the current or any future
Warrantholder. The term “Warrantholder” shall mean and include any successor of
the Warrantholder. The Warrants may be transferred by the Warrantholder or its
legal representatives or its attorney duly appointed by an instrument in writing
in form and execution reasonably satisfactory to the Corporation only by
surrendering to the Corporation this Warrant Certificate and completing and
delivering to the Corporation the transfer form attached hereto as Schedule
B or a substantial equivalent.

- 13 - 

13.                
Successors and Assigns 

13.1              
This Warrant Certificate shall enure to the benefit of the Warrantholder and the
successors and assignees thereof and shall be binding upon the Corporation and
the successors thereof. 

                      
IN WITNESS WHEREOF, the Corporation has caused this Warrant
Certificate to be signed by an authorized officer as of the ________ day
of_________, 2014. 

CRAILAR TECHNOLOGIES INC.

 

	Per:     _______________________________________________________________
	           Authorized
      Signatory 

__________ 

Schedule A 

SUBSCRIPTION FORM 

	To: 	Crailar Technologies Inc.
  

            The
undersigned registered holder irrevocably elects to exercise
_____________Warrants represented by this Warrant Certificate, and to purchase
the shares of Common Stock issuable upon the exercise of such Warrants, and
requests that certificates for such shares shall be issued in the name of: 

Name:
______________________________________________________
            (please
typewrite or print in block letters) 

Address:
____________________________________________________

____________________________________________________________

Tax ID Number:
______________________________________________

and be delivered to: 

Name: 
______________________________________________________
           
(please typewrite or print in block letters) 

Address:
____________________________________________________

____________________________________________________________

and, if such number of Warrants shall not be all the Warrants
evidenced by this Warrant Certificate, that a new Warrant Certificate for the
balance of such Warrants be registered in the name of, and delivered to, the
registered holder at the address stated below:

 

Dated: __________________

Signature: ________________

Address:
____________________________________________________

____________________________________________________________

Tax ID Number:
______________________________________________

__________ 

Schedule B 

FORM OF ASSIGNMENT 

[To be completed and signed only upon transfer of the Warrants]

	TO: 	Crailar Technologies Inc. 
	 	 
	RE: 	Warrants issued on ________, 2014 (Warrant
      Certificate No. ____) 

      
     FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto the transferee indicated below the right represented
by the above-captioned Warrant Certificate to purchase ____________ Common
Shares of Crailar Technologies Inc. (the “Corporation”) and appoints
_____________________ attorney to transfer said right on the books of the
Corporation with full power of substitution in the premises. 

Dated: _______________, ______

Holder: ________________________________________________
                   
(Print Name) 

Signature: 
______________________________________________
                   
(Signature must conform in all respects to name

                   
of holder as specified on the face of the
Warrant 
                   
Certificate. Indicate title if signing on behalf
of 
                   
an entity.) 

Transferee Information:

Name:
______________________________________________

Address:
____________________________________________

____________________________________________________

Fax No.:
______________________________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00232-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00232-of-00352.parquet"}]]