Common use of Registrant Status Clause in Contracts

Registrant Status. The Subscriber either: £ Is a person registered or required to be registered under the Securities Act (British Columbia). £ Is not a person registered or required to be registered under the Securities Act (British Columbia). TERMS OF SUBSCRIPTION AGREEMENT 1. Subject to the approval and consent (the "Approval") of the Exchange and the acceptance of this subscription by the Corporation, the Subscriber hereby irrevocably subscribes for and agrees to purchase from the Corporation, subject to the terms and conditions set forth herein, the Debenture in the Principal Amount set out above (the "Subscription Price") which is tendered herewith. Subject to the terms hereof, this subscription agreement (the "Subscription Agreement") will be effective when executed by all the parties to it. This subscription is part of an offering by the Corporation of Debentures with principal amounts, totalling in the aggregate, of up to CAD$5,000,000 (the "Offering"). 2. The Subscriber and the Corporation acknowledge and agree that the Debenture will be duly and validly created and issued pursuant to a trust indenture (the "Indenture") to be entered into between the Corporation and Computershare Trust Company of Canada (the "Trustee"), as trustee, to be dated the Closing Date. The Indenture will govern the terms of issue of the Debenture and the conversion of the same and shall include the following terms: (a) the Debenture will bear interest from the Closing Date at a rate of 10.0% per annum calculated and payable semi-annually in arrears on March 31 and September 30 in each year commencing September 30, 2013. The September 30, 2013 interest payment will represent interest for the period commencing on the Closing Date; (b) repayment of the Principal Amount on the Debenture, together with interest thereon, will be made on or prior to 5:00 p.m. (Vancouver time) on the date that is three years from the Closing Date (the "Maturity Date"); (c) upon Approval and the closing of the Offering, the Subscriber shall receive 800 transferable Warrants for each CAD$1,000 of Principal Amount tendered with each Warrant entitling the holder thereof to acquire one Warrant Share at an exercise price of CAD$1.25 per Warrant Share for a period of three years from the Closing Date; (d) the Debenture will be a direct obligation of the Corporation and will be secured by a charge on certain specific assets (the "Assets") of the Corporation and Crailar Inc. ("Crailar US"), a wholly owned subsidiary of the Corporation, located in South Carolina, having an initial cost/value of approximately CAD$5,000,000. The Debentures will rank in priority to any other obligations of the Corporation to the extent secured and otherwise will rank subordinate to all present and future senior indebtedness of the Corporation and will rank pari-passu with each other series of Debentures issued under this Offering and, except as prescribed by law, with all other existing and future unsecured indebtedness of the Corporation; (e) the Principal Amount on the Debenture is convertible into Common Shares at the option of the Subscriber, in whole or in part, at any time following the Closing Date prior to the close of business on the earlier of: (i) the Maturity Date, and (ii) the business day immediately preceding the Redemption Date (defined below), as applicable, at a conversion price of CAD$2.00 per Common Share (the "Conversion Price"), being a conversion rate of 500 Common Shares per CAD$1,000 Principal Amount of the Debenture subject to adjustment in certain events set out in the Indenture (the "Conversion Rate"). Upon conversion of the entire Principal Amount of the Debenture, the holder of the Debenture will receive any accrued and unpaid interest thereon from and including the period of the last interest payment date on the Debenture prior to the date of conversion to the date that is one business day prior to the date of conversion (the "Date of Conversion"). If a holder surrenders a Debenture for conversion on an interest payment date or during the five preceding business days, the person or persons entitled to receive Common Shares in respect of the Debenture so surrendered for conversion shall not become a holder or holders of record of such Common Shares until the business day following such interest payment date. No fractional Common Shares will be issued, and holders will receive a cash payment in satisfaction of any fractional interest based on the volume-weighted average trading price of the Common Shares on the Exchange for the 20 consecutive trading days ending on the fifth trading day preceding the Date of Conversion, provided, however, that the Corporation shall not be required to make any payment of less than CAD$5.00; (f) if the Corporation completes an aggregate of CAD$20,000,000 or more in any equity financing(s) between the Closing Date and the Maturity Date, the Company shall, subject to providing not less than 60 days' prior notice to each then Debenture holder, redeem the Debentures, in whole, for cash at par plus accrued and unpaid interest on the Principal Amount repaid to the date of prepayment (the "Redemption Date", and such requirement to redeem being the "Mandatory Redemption"). During the notice period of the Mandatory Redemption all Debenture holders will be entitled to exercise their right of Conversion at the Conversion Price in accordance with subsection 2(e) above; (g) the Corporation may at its option, at any time on or after two years from the Closing Date, redeem in whole or in part from time to time the Principal Amount of the Debenture without penalty at a redemption price equal to the Principal Amount plus accrued and unpaid interest on the Principal Amount repaid to the Redemption Date. The Corporation will be required to provide the holder of the Debenture not more than 60 and not less than 30 days' notice of the Redemption Date and the holder will have the right to accept the repayment or convert the Principal Amount at any time prior to the Redemption Date in accordance with subsection 2(e) above; (h) the Conversion Rate will be subject to standard anti-dilution provisions, including an adjustment to the Conversion Rate in certain events including, without limitation, the subdivision or consolidation of the outstanding Common Shares, the issue of Common Shares or securities convertible into Common Shares by way of stock dividend or distribution, a dividend or distribution paid to all or substantially all of the holders of Common Shares, the issue of rights, options or warrants to all or substantially all of the holders of Common Shares in certain circumstances, and the distribution to all or substantially all of the holders of Common Shares of any other class of shares, rights, options or warrants, evidences of indebtedness or assets. The Conversion Rate will also be subject to standard anti-dilution adjustments upon, inter alia, share consolidations, share splits, spin-off events, rights issues and reorganizations; (i) if the Corporation is required to withhold or deduct any amount for or on account of Canadian taxes from any payment made under or with respect to the Debenture, the Corporation, subject to certain exceptions as set out in the Indenture, will pay to each holder as additional interest such additional amounts (the "Additional Amounts") as may be necessary so that the net amount received by the holder after such withholding or deduction (and after deducting any Canadian taxes on such Additional Amounts) will not be less than the amount the holder would have received if such Canadian taxes had not been withheld or deducted; (j) the Corporation may purchase Debentures for cancellation by tender or by private contract at any time subject to regulatory requirements; and (k) the Indenture shall otherwise be in such form and contain such terms as shall be approved by the Corporation and the Trustee. 3. The Subscriber, acknowledges that the offer, sale and issuance of the Debenture as contemplated by this Subscription Agreement is subject to, among other things, the following conditions being fulfilled or performed on or before 5 p.m. (Vancouver time) on the day of completing this Subscription as the Corporation may determine (the "Closing Time"): (a) the Subscriber delivering to the Corporation not later than the Closing Time: (i) one fully completed and duly executed copy of this Subscription Agreement, including the applicable Schedules and all other documentation contemplated herein; (ii) a certified cheque, bank draft or evidence of completed wire transfer, payable to the Corporation, or such other method of payment acceptable to the Corporation, representing the aggregate Subscription Price payable for the Debenture subscribed for by the Subscriber; (b) the offer, sale and issuance of the Debenture being exempt from the prospectus and registration requirements of Applicable Securities Laws. As used in this Agreement, "Applicable Securities Laws" means any and all securities laws including, statutes, rules, regulations, by-laws, policies, guidelines, orders, decisions, rulings and awards, applicable in the jurisdiction in which the Debenture will be offered, sold and issued hereunder;

Registrant Status. The Subscriber either: £ Is a person registered or required to be registered under the Securities Act (British Columbia). £ Is not a person registered or required to be registered under the Securities Act (British Columbia). __________ TERMS OF SUBSCRIPTION AGREEMENT 1. AGREEMENT Subject to the approval and consent (the "Approval") of the Exchange and the acceptance of this subscription by the Corporation, the Subscriber hereby irrevocably subscribes for and agrees to purchase from the Corporation, subject to the terms and conditions set forth herein, the Debenture in the Principal Amount set out above (the "Subscription Price") which is tendered herewith. Subject to the terms hereof, this subscription agreement (the "Subscription Agreement") will be effective when executed by all the parties to it. This subscription is part of an offering by the Corporation of Debentures with principal amounts, totalling in the aggregate, of up to CAD$5,000,000 $5,000,000 (the "Offering"). 2. The Subscriber and the Corporation acknowledge and agree that the Debenture will be duly and validly created and issued pursuant to a trust indenture (the "Indenture") to be entered into between the Corporation and Computershare Trust Company of Canada (the "Trustee"), as trustee, to be dated the Closing date of Issue of the Debentures (the "Issue Date"). The Indenture will govern the terms of issue of the Debenture and the conversion of the same and shall include the following terms: (a) : the Debenture will bear interest from the Closing Issue Date at a rate of 10.0% per annum calculated and payable semi-annually in arrears on March 31 and September 30 in each year commencing September 30, 2013. The September 30, 2013 interest payment will represent interest for the period commencing on the Closing Issue Date; (b) ; repayment of the Principal Amount on the Debenture, together with interest thereon, will be made on or prior to 5:00 p.m. (Vancouver time) on the date that is three years from the Closing Date September 30, 2017 (the "Maturity Date"); (c) upon Approval and the closing of the Offering, the Subscriber shall receive 800 transferable Warrants for each CAD$1,000 of Principal Amount tendered with each Warrant entitling the holder thereof to acquire one Warrant Share at an exercise price of CAD$1.25 per Warrant Share for a period of three years from the Closing Date; (d) ; the Debenture will be a direct obligation of the Corporation and will be secured by a charge on those certain specific assets (the "Assets") of the Corporation and Crailar Inc. ("Crailar US"), a wholly wholly-owned subsidiary of the Corporation, located in South Carolina, having an initial cost/value which were granted as security (the "Prior Security") by the Corporation and Crailar US under the terms of approximately CAD$5,000,000that certain Convertible Debenture Indenture dated September 20, 2012, as entered into between the Corporation and Computershare Trust Company of Canada. The Debentures will be subordinated to the Prior Security on the Assets and will rank in priority to any other obligations of the Corporation to the extent secured and otherwise will rank subordinate to all present and future senior indebtedness of the Corporation and will rank pari-passu with each other series of Debentures issued under this Offering and, except as prescribed by law, with all other existing and future unsecured indebtedness of the Corporation; (e) ; the Principal Amount on the Debenture is convertible into Common Shares at the option of the Subscriber, in whole or in part, at any time following the Closing Issue Date prior to the close of business on the earlier of: (i) the Maturity Date, and (ii) the business day immediately preceding the Redemption Date Date(s) (defined below), as applicable, at a conversion price of CAD$2.00 $2.90 per Common Share (the "Conversion Price"), being a conversion rate of 500 Common 344.828 Shares per CAD$1,000 $1,000 Principal Amount of the Debenture subject to adjustment in certain events set out in the Indenture (the "Conversion Rate"). Upon conversion of the entire Principal Amount of the Debenture, the holder of the Debenture will receive any accrued and unpaid interest thereon from and including the period of the last interest payment date on the Debenture prior to the date of conversion to the date that is one business day prior to the date of conversion (the "Date of Conversion"). If a holder surrenders a Debenture for conversion on an interest payment date or during the five preceding business days, the person or persons entitled to receive Common Shares in respect of the Debenture so surrendered for conversion shall not become a holder or holders of record of such Common Shares until the business day following such interest payment date. No fractional Common Shares will be issued, and holders will receive a cash payment in satisfaction of any fractional interest based on the volume-weighted average trading price of the Common Shares on the Exchange for the 20 consecutive trading days ending on the fifth trading day preceding the Date of Conversion, provided, however, that the Corporation shall not be required to make any payment of less than CAD$5.00; $5.00. A Debenture in respect of which a holder has accepted a notice in respect of a Debenture Offer (fas defined below) pursuant to subsection 2(f) may be surrendered for conversion only if such notice is withdrawn in accordance with the Corporation completes an aggregate terms of CAD$20,000,000 or more the Indenture; in the event that the volume weighted average trading price of the Shares on the Exchange during any equity financing(s) between 20 consecutive trading days ending at least five trading days preceding the Closing Date and the Maturity Date, the Company shall, subject to providing date on which notice of redemption is given is not less than 60 days' prior notice to each then Debenture holder, redeem the Debentures, in whole, for cash at par plus accrued and unpaid interest on the Principal Amount repaid to the date of prepayment (the "Redemption Date", and such requirement to redeem being the "Mandatory Redemption"). During the notice period 125% of the Mandatory Redemption all Debenture holders will be entitled to exercise their right of Conversion at the Conversion Price in accordance with subsection 2(e) above; (g) Price, the Corporation may at its option, at any time on or after two years from September 30, 2015 and prior to the Closing Maturity Date, except in the event of the satisfaction of certain conditions after a Change of Control has occurred as outlined below, redeem in whole or in part from time to time the Principal Amount of the Debenture without penalty penalty, at a redemption price equal to the Principal Amount plus accrued and unpaid interest on the Principal Amount repaid to the applicable date of prepayment (the "Redemption Date"). The Corporation will be required to provide the holder of the Debenture not more than 60 and not less than 30 days' notice of the Redemption Date and the holder will have the right to accept the repayment or convert the Principal Amount at any time prior to the Redemption Date in accordance with subsection 2(e2(d) above; (h) the Conversion Rate will be subject to standard anti-dilution provisions, including an adjustment to the Conversion Rate in certain events including, without limitation, the subdivision or consolidation of the outstanding Common Shares, the issue of Common Shares or securities convertible into Common Shares by way of stock dividend or distribution, a dividend or distribution paid to all or substantially all of the holders of Common Shares, the issue of rights, options or warrants to all or substantially all of the holders of Common Shares in certain circumstances, and the distribution to all or substantially all of the holders of Common Shares of any other class of shares, rights, options or warrants, evidences of indebtedness or assets. The Conversion Rate will also be subject to standard anti-dilution adjustments upon, inter alia, share consolidations, share splits, spin-off events, rights issues and reorganizations; (i) if the Corporation is required to withhold or deduct any amount for or on account of Canadian taxes from any payment made under or with respect to the Debenture, the Corporation, subject to certain exceptions as set out in the Indenture, will pay to each holder as additional interest such additional amounts (the "Additional Amounts") as may be necessary so that the net amount received by the holder after such withholding or deduction (and after deducting any Canadian taxes on such Additional Amounts) will not be less than the amount the holder would have received if such Canadian taxes had not been withheld or deducted; (j) the Corporation may purchase Debentures for cancellation by tender or by private contract at any time subject to regulatory requirements; and (k) the Indenture shall otherwise be in such form and contain such terms as shall be approved by the Corporation and the Trustee. 3. The Subscriber, acknowledges that the offer, sale and issuance of the Debenture as contemplated by this Subscription Agreement is subject to, among other things, the following conditions being fulfilled or performed on or before 5 p.m. (Vancouver time) on the day of completing this Subscription as the Corporation may determine (the "Closing Time"): (a) the Subscriber delivering to the Corporation not later than the Closing Time: (i) one fully completed and duly executed copy of this Subscription Agreement, including the applicable Schedules and all other documentation contemplated herein; (ii) a certified cheque, bank draft or evidence of completed wire transfer, payable to the Corporation, or such other method of payment acceptable to the Corporation, representing the aggregate Subscription Price payable for the Debenture subscribed for by the Subscriber; (b) the offer, sale and issuance of the Debenture being exempt from the prospectus and registration requirements of Applicable Securities Laws. As used in this Agreement, "Applicable Securities Laws" means any and all securities laws including, statutes, rules, regulations, by-laws, policies, guidelines, orders, decisions, rulings and awards, applicable in the jurisdiction in which the Debenture will be offered, sold and issued hereunder;