Naked Brand Group Inc.: Exhibit 10.2 - Filed by newsfilecorp.com






Exhibit 10.2

AMENDED AND RESTATED PROMISSORY NOTE 

THIS AMENDED AND RESTATED PROMISSORY NOTE
is dated July 22, 2013 

BETWEEN: 

NAKED BRAND GROUP INC.,
formerly Search By Headlines.com Corp., (“NBGI”) a Nevada
corporation, and NAKED INC., formerly Naked Boxer Brief Clothing Inc.
(“Naked”), a Nevada corporation, both having an office for notice at 2-34346
Manufacturers Way, Abbotsford BC V2S 7M1 

(collectively, the “Borrowers”)


AND: 

[name and address] 

(the “Lender”) 

BACKGROUND: 

A.          Naked
is a wholly-owned subsidiary of NBGI, operating a product manufacturing and
distribution business for men’s clothing products. 

B.          Naked
requires funds to expand its inventory and sales operations, and, in order to
raise funds for that purpose, (i) Naked and NBGI has issued and will issue joint
and several convertible term promissory notes (the “Kalamalka
Loans”) to a group of accredited investors, as defined in applicable
securities legislation (the “Kalamalka Group”); and (ii) NBGI has
issued certain warrants to purchase common shares in its capital (each, a
“Warrant”) to Kalamalka Partners Ltd. (the “Agent”) and to each
member of the Kalamalka Group. 

C.          The
Kalamalka Loans are secured by: 

		(1) 	
      a general security agreement dated August 10, 2012
      between the Agent and NBGI for which a financing statement was registered
      in the British Columbia Personal Property Registry on August 9, 2012 under
      Base Registration Number 893601G, for which a UCC-1 Financing Statement
      was registered in the State of Nevada on August 13, 2012 under Document
      Number 2012021822-4, and for which a UCC-1 statement was registered in the
      State of California on August 13, 2012 under Filing Number 12-7324895970,
      as amended from time to time; and

	 	 	 	 
		(2) 	
      a general security agreement dated August 10, 2012
      between the Agent and Naked for which a financing statement was registered
      in the British Columbia Personal Property Registry on August 9, 2012 under
      Base Registration Number 893591G, for which a UCC-1 Financing Statement
      was registered in the State of Nevada on August 13, 2012 under Document
      Number 2012021823-6, and for which a UCC-1 statement was registered in the
      State of California on August 13, 2012 under Filing Number 12-7324896123,
      as amended from time to time;

	 	 	 	 
	 		
      (collectively, the “Registered
  Security”).







- 2 - 

D.          The
Lender is a member of the Kalamalka Group, is an accredited investor, has
entered into an agency and interlender agreement (the “Agency
Agreement”) with the other members of the Kalamalka Group, NBGI, Naked,
and the Agent pursuant to which the Agent will manage the obligations evidenced
by this Note and the Security (as hereinafter defined) for those obligations
provided for in this Note on the Lender’s behalf (as amended, supplemented and
replaced from time to time) and has previously loaned funds to the Borrowers as
provided for in this Note (the “Loan”). 

E.          The
Borrowers previously provided to the Lender a promissory note dated August 10,
2012 with respect to the Loan in the amount of USD$100,000 and the Borrowers and
the Lender wish to hereby amend and restate such promissory note in order to
reflect changes to the terms of the Loan. 

NOW THEREFORE THE PARTIES HERETO AGREE as follows: 

1.          For
value received the Borrowers hereby jointly and severally promise to pay to the
Lender the sum of USD$100,000.00 (the “Principal”) on August 16,
2014 (the “Due Date”). This Note will bear interest (the
“Interest”) on the Principal outstanding, from time to time, both before
and after maturity, default and judgment, commencing the date of advance of the
Principal to the Agent’s Account (as defined below), calculated and paid as
follows: 

	(a) 	
      on all Principal advanced by the Lender to the Agent’s
      Account but not advanced from the Agent’s Account to the Borrowers’
      Account (as defined below), or which has been repaid into the Agent’s
      Account by the Borrowers, the Borrowers will pay to the Lender interest at
      the rate of four percent (4%) per annum, calculated and payable monthly
      (the “Standby Interest”); and

	 	 
	(b) 	
      on all Principal advanced to the Borrowers’ Account, and
      until repaid to the Lender, the Borrowers will pay to the Lender interest
      at the rate of twelve percent (12%) per annum, calculated and payable
      monthly.



The Borrowers shall wire the Interest payable for each month to
the Agent’s Account no later than the last business day of that month. As a
courtesy, the Agent may prepare a statement of Interest owing for each month and
provide same to the Borrower prior to month-end. Notwithstanding the foregoing,
the Borrowers are responsible for ensuring that the correct amount of Interest
is paid each month. All deposit interest earned on the Agent’s Account shall
accrue to the benefit of the Kalamalka Group and be paid pro rata to the members
of the Kalamalka Group monthly within five business days of when it is credited
to the Agent’s Account by the institution holding that account.

2.          The
Lender shall advance the Principal into an account maintained by the Agent (the
“Agent’s Account”) pursuant to the Agency Agreement, and, at the written
direction of the Borrowers, the Agent shall advance such portion of the
Principal as may be provided in that direction into an account (the
“Borrowers’ Account”) managed by two representatives of the
Borrowers and two representatives of the Agent. All advances from the Borrowers’
Account to the Borrowers shall be jointly authorized by not less than one
representative of the Agent and one representative from the Borrowers. The
proceeds of the Loan shall be advanced to the Agent’s Account and from the
Agent’s Account to the Borrowers’ Account. Payments from the Borrowers’ Account
to the Agent’s Account designated as “interest payments” shall be deemed to be
interest payments made rateably to each member of the Kalamalka Group that is a
Lender. The Borrowers may prepay all or a portion of the Principal and any
accrued but unpaid interest thereon, provided that the Borrowers provide sixty
(60) days’ prior written notice to the Agent. In addition, the Borrowers may
make payments to the Agent’s Account designated as “repayment of advances” from
the Borrowers’ Account only if the Borrowers provide sixty (60) days’ prior
written notice to the Agent. Such “repayments of advances” shall not be deemed
to be a repayment of Principal to the Lender, but shall bear interest as
provided in Section 1(a), and must be accompanied by a repayment fee equivalent
to one percent (1%) of the amount of such payment. 




- 3 - 

3.          At the
Lender’s option, but subject to the provisions of the Agency Agreement, the
outstanding Principal and all accrued but unpaid interest represented by this
Note will become immediately due and payable upon written notice of acceleration
given by the Agent to the Borrowers following the occurrence of any of the
following events (each an “Event of Default”): 

	(a) 	
      if the Borrowers shall fail to pay any portion of the
      Principal, any Interest on this Note or any other sum due hereunder, on
      the date on which such amount shall become due and payable, whether at the
      stated date of maturity or at any accelerated date of maturity or at any
      other date fixed for payment;

	 	 
	(b) 	
      if the Borrowers shall fail to perform in any material
      respect any of the other covenants and agreements set forth herein or in
      any security granted by either of them in connection with their
      obligations under this Note and under any Note issued to a lender in
      connection with the Agency Agreement (collectively the “Security”),
      and not cure such failure within ten (10) days after notice
  thereof;

	 	 
	(c) 	
      if any material representation or warranty of the
      Borrowers in this Note, the officer’s certificate of NBGI, or the
      officer’s certificate of Naked shall prove to have been false in any
      material respect upon the date when made or deemed to have been made or
      repeated;

	 	 
	(d) 	
      if a Borrower shall fail to pay at maturity, or within
      any applicable period of grace, any obligation for borrowed money or
      credit received or in respect of any capitalized lease, in each case for
      which such Borrower’s obligations exceed CAD$50,000, or fail to observe or
      perform any material term, covenant or agreement contained in any material
      agreement by which it is bound and evidencing or securing borrowed money
      or credit received or in respect of any such capitalized lease for such
      period of time or otherwise as would permit (assuming the giving of
      appropriate notice if required) the holder or holders thereof or of any
      obligations issued thereunder to accelerate the maturity thereof, or any
      such holder or holders shall rescind or shall have a right to rescind the
      purchase of any such obligations;

	 	 
	(e) 	
      if a Borrower shall make an assignment for the benefit of
      creditors, or admit in writing its inability to pay or generally fail to
      pay its debts as they mature or become due, or petition or apply for the
      appointment of a trustee or other custodian, liquidator or receiver of a
      Borrower or of any substantial part of its respective assets or shall
      commence any case or other proceeding relating to a Borrower under any
      bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
      dissolution or liquidation or similar law of any jurisdiction, now or
      hereafter in effect, or shall authorize any of the foregoing, or if any
      such petition or application shall be filed or any such case or other
      proceeding shall be commenced against a Borrower or a Borrower shall
      indicate its approval thereof, consent thereto or acquiescence therein or
      such involuntary petition or application shall not have been dismissed
      within sixty (60) days following the filing thereof;

	 	 
	(f) 	
      if a decree or order shall be entered appointing any
      trustee, custodian, liquidator or receiver of a Borrower or of any
      substantial part of its assets, or adjudicating a Borrower bankrupt or
      insolvent, or approving a petition in any such case or other
      proceeding;

	 	 
	(g) 	
      if there shall remain in force, undischarged,
      unsatisfied, unvacated, unbonded or unstayed, for more than sixty (60)
      days, any final judgment against a Borrower that, with other such
      outstanding final judgments against a Borrower or any subsidiary of a
      Borrower that are undischarged, unsatisfied, unvacated, unbonded or
      unstayed, exceeds in the aggregate CAD$25,000 in excess of insurance
      coverage which the insurer has acknowledged and confirmed it would provide
      with respect to such judgment;

	 	 
	(h) 	
      if this Note or any Security shall be cancelled,
      terminated, revoked or rescinded, or any action at law, suit or in equity
      or other legal proceeding to cancel, revoke or rescind this Note or any
      security shall be commenced by or on behalf of a Borrower or its
      shareholders, or any court or any other governmental or regulatory authority or agency
      of competent jurisdiction shall make a determination that, or issue a
      judgment, order, decree or ruling to the effect that, any one or more
      provisions of this Note or any Security is illegal, invalid or
      unenforceable in accordance with the terms thereof;







- 4 - 

	(i) 	
      if there shall occur (i) a sale or disposition of all or
      substantially all of the assets of a Borrower, or (ii) any transfer of
      beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
      United States Securities and Exchange Commission under the Securities
      Exchange Act of 1934, as amended), directly or indirectly, of all or
      any portion of the outstanding shares of a Borrower, in a single
      transaction or a series of related transactions except, in the case of a
      transfer of beneficial ownership of common shares in the capital of a
      Borrower where the shareholders of that Borrower immediately prior to such
      transaction or series of related transactions retain directly or
      indirectly at least fifty percent (50%) of the voting power in that
      Borrower or the successor or acquiring entity (as applicable);
  and

	 	 
	(j) 	
      if there occurs a Material Adverse Effect as defined in
      subsection (i) of the definition thereof or that otherwise is not curable,
      or (b) there occurs any other Material Adverse Effect that continues in
      existence uncured for five business days. “Material Adverse Effect” means
      any event or series of events that, individually or in the aggregate,
      results in (i) a material adverse change in, or a material adverse effect
      upon, the operations, business, properties, or condition (financial or
      otherwise) of a Borrower (including without limitation the withdrawal by
      applicable authorities of a business license of a Borrower which business
      license would be necessary to conduct its business as currently conducted
      or as contemplated to be conducted), (ii) a material impairment of the
      ability of a Borrower to perform under this Note, the Security to which it
      is a party or any other note or agreement to which a Borrower is a party,
      or (iii) a material adverse effect upon the legality, validity, binding
      effect or enforceability against a Borrower of this Note, any Security to
      which it is a party or any other note or agreement to which Borrower or
      any Subsidiary is a party. For greater certainty, a Material Adverse
      Effect shall include a material adverse change in the business plans of
      the Borrowers as represented to the Agent.



4.          Upon
the occurrence of an Event of Default and at any time thereafter, provided the
Event of Default has not been waived by the Agent or the Borrowers have not
theretofore remedied all outstanding Events of Default within the prescribed
time period, the Agent may at its option, but in accordance with the provisions
of the Agency Agreement, by notice to the Borrowers: 

	(a) 	
      terminate the ability of the Borrowers to request further
      advances from the Agent’s Account; 

	  	  
	
      (b) 
	
      declare the Principal, Interest and all other amounts
      owing under this Note to be immediately due and payable; and 

	  	  
	(c) 	
      enforce all rights and remedies granted under the
      Security. 

	  	  
	5.          Each of
      the Borrowers represents and warrants to the Lender that: 
	  	  
	
      (a) 
	
      it is a corporation duly organized, validly existing and
      in good standing under the laws of its jurisdiction of incorporation or
      continuation, and is qualified and licensed to do business in any
      jurisdiction in which the conduct of its business or its ownership of
      property requires that it be so qualified, except those jurisdictions
      where failure to be so qualified would not be reasonably likely to have a
      Material Adverse Effect; 

	  	  
	
      (b) 
	
      it has all requisite corporate power and authority to own
      and operate its properties, to carry on its business as now conducted and
      as proposed to be conducted and to enter into and carry out the
      transactions contemplated by this Note and the Security; 

	  	  
	
      (c) 
	
      the execution, delivery and performance of this Note are
      within its powers, have been duly authorized, are not or will not be in
      conflict with or constitute a breach of any provision contained in its enabling documents, and do not or will not
      contravene, conflict with or result in a violation or breach of, or result
      in a default under, any provision of any material agreement to which it is
      a party or by which it is bound, or give any person the right to (i)
      declare a default or exercise any remedy under any such material
      agreement, (ii) accelerate the maturity or performance of any such
      material agreement, or (iii) cancel, terminate or modify any such material
      agreement;







- 5 - 

	(d) 	
      it has obtained or made all orders, consents, approvals,
      licenses, authorizations or validations of, or filings, recordings or
      registrations with, or exemptions by, any governmental or public body or
      authority, or any subdivision thereof, required to authorize, or required
      in connection with, (i) the execution, delivery and performance of this
      Note and the Security to which it is a party, or (ii) the legality,
      validity, binding effect or enforceability of this Note and the Security
      to which it is a party.

	 	 
	(e) 	
      it has not granted or agreed to grant any registration
      rights, anti-dilution protections, protective provisions, liquidation
      preferences, redemption rights or other investor protection rights to any
      person or entity;

	 	 
	(f) 	
      the audited financial statements of Naked for the fiscal
      year ended January 31, 2012, the unaudited financial statements of Naked
      for the period ending October 31, 2012, the audited financial statements
      of NBGI, presented on a consolidated basis, for the fiscal year ended
      January 31, 2012, and unaudited financial statements of NBGI for the
      period ending October 31, 2012 (collectively the “Financial
      Statements”) and the related statements of income, cash flows and
      shareholder’s equity of NBGI and its subsidiaries, on a consolidated
      basis, for the fiscal years or periods ended on such dates, true and
      correct copies of which have been furnished to the Agent and the Lenders
      prior to the date hereof, present fairly in all material respects the
      consolidated financial position of NBGI and its subsidiaries at the dates
      of such balance sheets and the results of the operations of NBGI and its
      subsidiaries for the periods covered thereby and the Financial Statements
      have been prepared in accordance with U.S. generally accepted accounting
      principles applied on a consistent basis throughout the periods indicated
      and with each other, except that the unaudited financial statements may
      not contain all footnotes required by generally accepted accounting
      principles or be subject to year-end audit adjustments;

	 	 
	(g) 	
      except as fully disclosed in the Financial Statements or
      otherwise disclosed to the Agent there are no liabilities or obligations
      with respect to it of any nature whatsoever (whether absolute, accrued,
      contingent or otherwise, and whether or not due) which, either
      individually or in aggregate, would be reasonably likely to be material to
      it;

	 	 
	(h) 	
      except as previously disclosed to the Agent or disclosed
      in the Financial Statements, since October 31, 2012 there has been no
      change in its business, operations, property, assets, liabilities or
      condition (financial or otherwise) which change would be reasonably likely
      to have a Material Adverse Effect;

	 	 
	(i) 	
      upon any issuance of shares pursuant to the due exercise
      of the Warrants, such shares will be duly authorized, validly issued,
      fully paid and non-assessable, and free of any liens or encumbrances,
      except for restrictions on transfer under applicable securities
    laws;

	 	 
	(j) 	
      this Note and the Security to which it is a party have
      been duly executed and delivered by it and are legally valid and binding
      obligation of it, enforceable against it in accordance with their
      respective terms, except as may be limited by bankruptcy, insolvency,
      reorganization, moratorium or similar laws relating to or limiting
      creditors’ rights generally or by equitable principles relating to
      enforceability;

	 	 
	(k) 	
      except as previously disclosed to the Agent, there are no
      pending or, to either Borrower’s knowledge, threatened actions or
      proceedings to which a Borrower is party before any court or regulatory or
      administrative agency, whether Canadian or foreign, in which a decision
      adverse to a Borrower would be reasonably likely to have a Material
      Adverse Effect;







- 6 - 

	(l) 	
      it has filed or caused to be filed all tax returns
      required to be filed, and has paid, or has made adequate provision for the
      payment of, all material taxes reflected therein or otherwise
  owed;

	 	 
	(m) 	
      it does not own any real property and it has good and
      marketable title to all of its material properties and material assets,
      including all material property reflected in the most recent balance
      sheets included in the Financial Statements free and clear of all liens,
      charges or encumbrances (a "Lien") except Permitted
Liens;

	 	 
	(n) 	
      to the best of its knowledge, it is in compliance with
      all applicable statutes, regulations and orders of, and all applicable
      restrictions imposed by, all governmental bodies, domestic or foreign, in
      respect of the conduct of its business and the ownership of its property
      (including applicable statutes, regulations, orders and restrictions
      relating to environmental standards and controls), except where the
      failure to be so in compliance would not be reasonably likely to have a
      Material Adverse Effect; and

	 	 
	(o) 	
      it is not in material default in or material breach of
      the performance, observance or fulfillment of any of the obligations,
      covenants or conditions contained in any of its material contracts, no
      condition exists that, with the giving of notice or the lapse of time or
      both, would constitute such a material default, and, to its knowledge, no
      counterparty to any such material contract is in material default in or
      material breach of any such material contract.



6.          Except
for Section 6(b) which is a covenant of NBGI only, each of the Borrowers
covenants and agrees that, so long as any of their obligations under this Note
remain outstanding, they shall do all of the following: 

	(a) 	
      duly and punctually pay or cause to be paid the Principal
      and Interest and all other amounts provided for in this Note and in the
      Security in accordance with the terms hereof;

	 	 
	(b) 	
      reserve out of the authorized and unissued capital of
      NBGI an adequate number of common shares such that, upon any exercise of
      the Warrants, such shares shall be immediately issuable;

	 	 
	(c) 	
      preserve and maintain in full force and effect its legal
      existence and good standing in its respective jurisdictions of
      organization and maintain qualification in each jurisdiction in which
      qualification is required under applicable law, except where the failure
      to be so qualified would not be reasonably likely to have a Material
      Adverse Effect;

	 	 
	(d) 	
      notify the Agent in writing promptly upon becoming aware
      of any event or change that has caused, or evidences, an Event of Default
      or a Material Adverse Effect, together with a reasonably detailed
      description thereof and the actions it proposes to take with respect
      thereto;

	 	 
	(e) 	
      notify the Agent in writing promptly upon entering into
      any discussions, negotiations, agreements, understandings or arrangements
      relating to any financing or acquisition proposal, whether completed or
      proposed, from the date hereof to and including the earlier of the
      conversion or payment of all sums due hereunder;

	 	 
	(f) 	
      notify the Agent in writing promptly upon obtaining
      knowledge of the institution or threat of any action or proceeding against
      or affecting it or any of its property, and any material development in
      any such action or proceeding, that: (i) if adversely determined, has a
      reasonable possibility of giving rise to a Material Adverse Effect, or
      (ii) seeks to enjoin or otherwise prevent the consummation of, or to
      recover any damages or obtain relief as a result of, the transactions
      contemplated by this Note. It shall provide the Agent with additional
      information regarding any such action or proceeding as may be reasonably
      requested by the Agent to evaluate such action or proceeding, including
      copies of any filings;

	 	 
	(g) 	
      keep all property necessary to its business in reasonably
      good working order and condition, ordinary wear and tear
  excepted;







- 7 - 

	(h) 	
      make due and timely payment or deposit of all material
      federal, state, provincial, local and other Canadian, US and foreign
      taxes, assessments, or contributions required by law;

	 	 	 
	(i) 	
      comply with all applicable statutes, regulations and
      orders of, and all applicable restrictions imposed by, all governmental
      bodies, domestic or foreign, in respect of the conduct of its business and
      the ownership of their property (including applicable statutes,
      regulations, orders and restrictions relating to intellectual property and
      environmental standards and controls), except where the failure to so
      comply would not be reasonably likely to have a Material Adverse
      Effect;

	 	 	 
	(j) 	
      take all actions and execute all writings or documents,
      including the preparation, delivery and prosecution of authorization
      requests and filings with governmental authorities, as may reasonably be
      requested by the Agent in connection with the current or future exercise
      of a Warrant or other rights of Lender under this Note;

	 	 	 
	(k) 	
      keep adequately insured by financially sound and
      reputable insurers all assets and property of a character customarily
      insured by persons engaged in similar businesses similarly situated,
      including inventory, against loss or damage of the kinds customarily
      insured against by such persons, in such amounts as are customarily
      insured for by such persons, and, in the case of inventory, maintain at
      minimum insurance equivalent to the value of the total indebtedness owed
      to the Kalamalka Group; that it will forthwith notify the Agent of any
      significant loss; that it will duly and punctually pay all premiums and
      other sums of money for maintaining such insurance; and that it will name
      the Agent as an additional loss payee on all insurance policies;

	 	 	 
	(l) 	
      deliver to the Agent:

	 	 	 
		(i) 	
      within 90 days of the fiscal year end, audited
      consolidated financial statements of the Borrowers and any of their
      subsidiaries;

	 	 	 
		(ii) 	
      within 45 days of the end of a month, unaudited
      consolidated profit and loss statement and balance sheet for the
    month;

	 	 	 
		(iii) 	
      within 45 days of the end of the first three (3) fiscal
      quarters and within 90 days of the end of the fourth fiscal quarter, a
      management report on the quarter’s results and operations;

	 	 	 
		(iv) 	
      within 90 days of the fiscal year end, unaudited
      non-consolidated financial statements of the Borrowers and any of their
      subsidiaries;

	 	 	 
		(v) 	
      at least 30 days before the commencement of each fiscal
      year, a business plan for the next fiscal year, together with the
      operating, capital expenditure and research and development budgets,
      approved by the Board;

	 	 	 
		(vi) 	
      within three (3) Business Days after its receipt by
      either of the Borrowers, a copy of any notice to such Borrower of any
      alleged material breach of contract or obligation, together with
      management’s proposed manner of response to such alleged breach;

	 	 	 
		(vii) 	
      within three (3) Business Days after any actual,
      apparent, or suspected loss of any material amount of inventory or
      receivables, notice to the Agent of all information concerning such loss
      or potential loss, together with management’s proposed manner of
      response;

	 	 	 
		(viii) 	
      monthly margin reports with respect to Naked within ten
      (10) Business Days of each month end including, without limitation,
      information relating to detailed inventory and receivables listings;
      and

	 	 	 
		(ix) 	
      any such other information, accounts, data and
      projections reasonably required by the Lender;
and







- 8 - 

	(m) 	
      in the case of Naked, maintain a borrowing base
      equivalent to a discount factor of 0.90 multiplied by the value of the sum
      of the value of Naked’s inventory plus the value of its accounts
      receivable and, in the case of NBGI, ensure that Naked maintains such
      borrowing base. For greater certainty, except as otherwise agreed between
      the parties, inventories will be calculated at the lower of cost or market
      value and include adjustments for estimated obsolete or excess inventory
      determined by future estimated sales in relation to older or out of season
      product. Cost is based on actual cost on a weighted average basis. The
      costs of finished goods inventories include raw materials and direct
      labour. Inventory shall include raw material in transit in the possession
      of the Borrower, materials in the course of production, work in progress,
      and unsold finished goods. The calculation of accounts receivable for
      margining purposes shall include only those accounts current as of 60 days
      that are expected to be collectable, except that up to $10,000 of
      receivables may be included in the borrowing base for the purpose of
      calculating margin if such receivables are more than 60 days old but less
      than 90 days old. Naked and NBGI, within fifteen (15) days of either party
      being made aware that Naked does not meet its borrowing base requirement,
      shall repay to the Agent on behalf of the Kalamalka Group any amounts
      required to maintain Naked’s borrowing base with such
  lenders.



7.          Each
of the Borrowers covenants and agrees that, so long as any of its obligations
under this Note remain outstanding, it shall not do any of the following without
the Agent’s written consent: 

	(a) 	
      use the funds advanced under the Loan for any purpose
      other than the financing of inventory and receivables;

	 	 	 
	(b) 	
      incur any indebtedness or guarantee any indebtedness or
      issue or sell any debt securities or guarantee any debt securities of
      others other than (i) the indebtedness evidenced by this Note; (ii) as
      disclosed in the Financial Statements; and (iii) with respect to the
      Permitted Liens;

	 	 	 
	(c) 	
      create, incur, assume or suffer to exist any lien or
      encumbrance upon or with respect to any of its property or assets (real or
      personal, tangible or intangible) (“Liens”), whether now owned or
      hereafter acquired, or sell any such property or assets subject to an
      understanding or agreement, contingent or otherwise, to repurchase such
      property or assets (including sales of accounts receivable with recourse
      to it), or assign any right to receive income or permit the filing of any
      security interest under the British Columbia Personal Property Security
      Act or any other similar notice of lien or encumbrance under any
      similar recording or notice statute, provided that the provisions of this
      Subsection 7(b) shall not prevent the creation, incurrence, assumption or
      existence of the following (collectively the “Permitted
    Liens”):

	 	 	 
		(i) 	
      inchoate Liens for taxes, assessments or governmental
      charges or levies not yet due or Liens for taxes, assessments or
      governmental charges or levies being contested in good faith and by
      appropriate proceedings for which adequate reserves have been established
      in accordance with generally accepted accounting principles;

	 	 	 
		(ii) 	
      Liens in respect of its property or assets imposed by
      law, which were incurred in the ordinary course of business and do not
      secure indebtedness for borrowed money, such as carriers’, warehousemen’s,
      materialmen’s and mechanics’ liens and other similar Liens arising in the
      ordinary course of business, and which do not in the aggregate materially
      detract from the value of its property or assets or impair the use thereof
      in the operation of its assets subject thereto;

	 	 	 
		(iii) 	
      Liens arising under original purchase price conditional
      sales contracts and equipment leases with third parties entered into in
      the ordinary course of business consistent with past practices;

	 	 	 
		(iv) 	
      the Liens created by the Security;
or







- 9 - 

		(v) 	
      any Liens consented to in writing by the Agent from time
      to time, such consent not to unreasonably withheld.

	 	 	 
	(d) 	
      wind up, liquidate or dissolve its affairs, or convey,
      sell, lease or otherwise dispose of all or any part of its property or
      assets (in one or a series of related transactions), or enter into any
      sale- leaseback transactions for any part of its property or assets
      involving any person other than Lender (or agree to do any of the
      foregoing at any future time), except in each case for sales of inventory,
      materials and equipment in the ordinary course of business consistent with
      past practice; or

	 	 	 
	(e) 	
      make any distribution to any or all of its shareholders,
      or redeem or acquire any or all of such shareholders’ shares or options in
      NBGI (other than issuances of options or repurchases of options or equity
      securities at cost pursuant to any equity plan adopted by NBGI for the
      benefit of employees or consultants of NBGI); or create or suffer to exist
      any encumbrance or restriction on the ability of Naked to (i) pay
      dividends or make other distributions to NBGI, (ii) repay or prepay any
      indebtedness owed by Naked to NBGI.



8.          The
Lender shall not be obligated to advance the Loan unless, on the date of the
first advance, all representations and warranties of the Borrowers contained in
this Note and the Security are true and correct, no Event of Default has
occurred and is continuing and the Agent has received on behalf of the Lender
the following: 

	(a) 	
      duly executed originals of this Note, the Security and
      all other documents which the Borrowers have covenanted to deliver to
      cause to be delivered under this Note or the Security;

	 	 
	(b) 	
      certificates of status or good standing for each of the
      Borrowers issued by the relevant authority in its jurisdiction of
      incorporation and all jurisdictions where it is required to be registered
      by virtue of conducting business in such jurisdiction;

	 	 
	(c) 	
      a certified copy of resolutions of the directors of each
      of the Borrowers authorizing the execution, delivery and performance of
      this Note, the Security and the instruments, agreements, certificates and
      other documents contemplated in this Note and the Security;

	 	 
	(d) 	
      a certificate of a responsible officer of each of the
      Borrowers, certifying certain matters as to each of the
  Borrowers;

	 	 
	(e) 	
      evidence satisfactory to the Agent of the perfection of
      the Security in British Columbia, Nevada, California, and any other
      jurisdiction where the Borrowers’ inventory or material assets are
      located.



9.         
Concurrently with the execution of this Note, NBGI shall extend the expiry date
of the Lender’s Class E Warrant for the purchase of 25,000 Common shares of NBGI
at an exercise price of USD$0.25 per share to on or before 4:00PM on August 10,
2017. While this Note is outstanding the Lender shall be permitted to apply any
or all outstanding Principal and Interest to payment of the exercise price of
the respective Warrants. 

10.         At the
option of the Lender, at maturity or at any time prior to maturity, the Lender
may convert the balance outstanding under the Loan, including Principal and
Interest from time to time, in whole or in part into Common shares of NBGI. The
conversion rate will be 1 Common share of NBGI for each fifty cents (USD$0.50)
of the Loan so converted (the “Conversion Price”). If, at any time while
any portion of the Loan is outstanding, NBGI subdivides, consolidates, or pays a
stock dividend on the Common shares, the Conversion Price will be simultaneously
adjusted upon the happening of each such event and the Conversion Price shall be
calculated by multiplying the Conversion Price in effect immediately prior to
such event by the following fraction: 




- 10 - 

	 	(a) 	
      the numerator of which is the number of Common shares
      issued and outstanding immediately prior to the event; and

	 	 	 
	 	(b) 	
      the denominator of which is the number of Common shares
      issued and outstanding immediately after the completion of the
    event.



If, at any time while any portion of the Loan is outstanding,
the Common shares are changed into a different class or classes of shares,
whether by reclassification, recapitalization, reorganization, arrangement,
amalgamation or merger, the Lender shall have the right to convert all or any
portion of the Loan outstanding into the kind and amount of shares and other
securities and property receivable upon such change by holders of that number of
shares then to which the Loan could have been converted immediately prior to
such change. Adjustments made under this Section shall be successive and each
resulting new Conversion Price shall continue in effect until the next
adjustment (if any) made hereunder. 

11.         The
Borrowers hereby confirm that the Registered Security is valid and enforceable
and constitutes security for all of the Kalamalka Loans including, without
limitation, the Loan hereunder and that the Registered Security shall remain in
full force and effect for the benefit of the Agent in its capacity as agent for
the Kalamalka Group following the execution of this Note. 

12.         The
Borrowers and the Lender acknowledge and agree that the rights and obligation
under this Note and the Security are subject to the provisions of the Agency
Agreement and that this Note ranks, in all respects, pari passu with
notes issued concurrently to other members of the Kalamalka Group who are also
parties to the Agency Agreement. 

13.         The
Borrowers hereby waive presentment or demand for payment and waives and foregoes
any claim or right of set-off, contribution, or any other defense or
diminishment or set off of the amount herein evidenced and secured. Borrower
further waives all defense or pleadings or cross-claim as answer or to resist
demand or repayment and acknowledges and acquiesces to the filing of process by
Lender and the taking of judgment and the execution of such process and waives
all defenses or counterpleading thereto excepting only prior payment or the
non-advance of the Principal of the Loan.

14.        
SECURITIES DECLARATION AND ENFORCEABILITY 

The parties hereto acknowledge that this security, or any
resultant securities, has not been registered under the securities laws of any
jurisdiction and is being issued pursuant to an exemption from
registration.

15.         This Note
will be binding on and enure to the benefit of the Lender, its successors and
permitted assigns and the Borrowers and their respective permitted successors
and assigns. 

16.         If any part
or provision of this Note is invalid or unenforceable it will at the election of
the Lender be severed from this Note and the remainder of this Note will be
construed as if such invalid or unenforceable part or provision had been deleted
from this Note. 

17.         This Note
and all matters arising hereunder will be governed by the laws of the Province
of British Columbia. 

[EXECUTION PAGE TO FOLLOW] 




- 11 - 

IN WITNESS WHEREOF the Borrowers have executed this Note
effective as the date first above written. 

NAKED BRAND GROUP INC. 
by its authorized signatory



/s/ Alex McAulay                               
 
Name: Alex McAulay
Title: CFO, Director


NAKED INC. 
by its authorized signatory 


/s/ Alex McAulay                               
 
Name: Alex McAulay
Title: CFO, Director