Document:

Naked Brand Group Inc.: Exhibit 10.8 - Filed by newsfilecorp.com

	CONFIDENTIAL 	EXECUTION VERSION 

AMENDMENT TO AMENDED AND RESTATED PROMISSORY NOTE 

THIS AMENDMENT (this “Amendment”) is dated
April 4, 2014 (the “Amendment Date”) 

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 

	  
	(together, the “Borrowers”)

AND: 

	Each of the persons listed on Annex I
      to this Amendment under the heading “Lender” 
	  
	(each, a “ Lender” and collectively, the
      “Lenders” or the “Kalamalka Lenders”)

WHEREAS: 

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

	 	 
	B. 	
      The Borrowers have issued certain secured convertible
      promissory notes (the “Promissory Notes” or the “Kalamalka
      Notes”; capitalized terms used but not otherwise defined herein shall
      have the meanings ascribed to them in the Promissory Notes) in the
      aggregate principal sum of $400,000 (the “Indebtedness”) to the
      Lenders in connection with that certain Agency and Interlender Agreement,
      dated as of August 10, 2012, as amended, among the Borrowers, Kalamalka
      Partners Ltd., as agent (the “Agent ”), and each of the Lenders;
      and NBGI has issued to the Agent and the Lenders certain warrants (the
      “Existing Warrants”) to purchase shares of common stock of NBGI
      (“Common Stock”), including certain Class D Warrants that are
      exercisable at a price of $0.50 (the “Class D Warrants”) that were
      issued to Darroch Investments Ltd. (“Darroch”), a Lender, and
      certain individuals designated by Darroch (such individuals, the
      “Darroch Designees”).

	 	 
	C. 	
      Naked requires additional funds to expand its inventory
      and sales operations, and, in order to raise funds for that purpose, NBGI
      desires to issue certain secured convertible promissory notes (the
      “Bridge Notes”) to a group of accredited investors (as defined in
      applicable U.S. federal securities legislation) (the “Bridge
      Investors”) in connection with an agency and interlender agreement to
      be dated as of even date herewith (the “Bridge Financing
      Transaction”).

	 	 
	D. 	
      Following the issuance of the Bridge Notes, NBGI intends
      to complete a round of equity financing through a private placement (the
      “Offering”) of certain secured convertible debentures (the
      “Offering Debentures”).

	 	 
	E. 	
      In connection with the Bridge Financing Transaction, the
      Borrowers desire to amend each of the Promissory Notes; and, as an
      inducement of the Lenders willingness to enter into this Amendment, NBGI
      shall issue to the Agent and the Lenders collectively three warrants per
      $1 of Indebtedness to purchase 1,200,000 shares of Common Stock in the
      aggregate at an exercise price equal to $0.15 and a term of five years
      from the initial closing date of the Offering (the “Closing”) and
      on such other terms as shall be described in the Offering Debentures (such
      warrants, the “New Warrants”). As a further inducement, NBGI has
      offered each of the Lenders the option to cancel any or all of their
      Existing Warrants and, in turn, receive New Warrants in replacement
      thereof, and Darroch has elected to cancel its Class D Warrants, as well
      as those of the Darroch Designees, and in turn, receive New Warrants in
      replacement thereof (on behalf of itself and the Darroch Designees).
    

NOW THEREFORE THE PARTIES HERETO AGREE as follows: 

	1. 	
      Section 1 of each of the Promissory Notes is hereby
      amended by replacing “August 16, 2014” in the first sentence with “October
      1, 2016” and replacing each reference in the second paragraph to “month”
      with “quarter”.

	 	 
	2. 	
      Section 1(b) of each of the Promissory Notes is hereby
      amended and restated in its entirety to read as
follows:

	
      “on all Principal advanced to the Borrowers’ Account, the
      Borrowers will pay to the Lender (i) Interest at the rate of twelve
      percent (12%) per annum prior to the Amendment Date, and (ii) Interest at
      the rate of six percent (6%) per annum on or after the Amendment Date and
      until repaid to the Lender, in each case of clause (i) and (ii), such
      Interest calculated daily and payable quarterly.”

	3. 	
      Section 3(a) of each of the Promissory Notes is hereby
      amended and restated in its entirety to read as
follows:

	
      “if the Borrowers shall fail to pay any portion of the
      Principal, any Interest on this Note or any other sum due hereunder (or
      under any other Kalamalka Note or any Bridge Note or Offering Debenture),
      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;” 

	4. 	
      Section 3(b) of each of the Promissory Notes is hereby
      amended and restated in its entirety to read as
follows:

	
      “if the Borrowers shall fail to perform in any material
      respect any of the other covenants and agreements set forth (i) herein (or
      in any other Kalamalka Note) 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”), or (ii) in any Bridge Note or Offering Debenture,
      or in any security granted by either of the Borrowers in connection with
      their obligations under any Bridge Note or Offering Debenture, and in each
      case of (i) and (ii) not cure such failure within ten (10) days after
      notice thereof;” 

	5. 	
      Section 3(d) of each of the Promissory Notes is hereby
      amended by replacing “CAD$50,000” with
“USD$200,000”.

2 

	6. 	
      Section 3(g) of each of the Promissory Notes is hereby
      amended by replacing “CAD$25,000” with “USD$25,000”.

	 	 
	7. 	
      Section 3(i) of each of the Promissory Notes is hereby
      amended by and restated in its entirety to read as
  follows:

	
      “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 common shares of a Borrower, in a single
      transaction or a series of related transactions, except (i) 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 (ii) in
      connection with a merger, consolidation, reorganization, restructuring or
      other similar transaction of entities controlled by, controlling or under
      common control with any of the Borrowers; and”

	8. 	
      Section 6 of each of the Promissory Notes is hereby
      amended by adding “and Section 6(m)” after “Section 6(b)” in the first
      sentence of the first paragraph.

	 	 
	9. 	
      Section 6(e) of each of the Promissory Notes is hereby
      deleted in its entirety .

	 	 
	10. 	
      Section 6(f) of each of the Promissory Notes is hereby
      amended by replacing the entire second sentence with the
  following:

	
      “It shall provide the Agent, at Agent’s sole cost and
      expense, 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;”

	11. 	
      Sections 6(l)(vi) and (vii) of each of the Promissory
      Notes are hereby amended by replacing “three (3)” with “ten
  (10)”.

	 	 
	12. 	
      Section 6(l)(viii) of each of the Promissory Notes is
      hereby deleted in its entirety.

	 	 
	13. 	
      Section 6(m) of each of the Promissory Notes is hereby
      deleted in its entirety and replaced to read as
follows:

	
      “make any repayment or prepayment in respect of any
      amounts outstanding under the Bridge Notes or the Offering Debentures
      prior to the Due Date, unless such repayment or prepayment is made to each
      of the Bridge Investors, the Kalamalka Lenders and all the holders of the
      Offering Debentures (each, a “Holder”) on a pro- rata basis as
      determined, with respect to each such Holder, by the percentage of (i) the
      amount of such Holder’s then outstanding principal loan and accrued and
      unpaid interest under the Bridge Note, the Kalamalka Note or the Offering
      Debenture, as applicable, in relation to (ii) the total amount of the then
      outstanding principal loans and accrued and unpaid interest under the
      Bridge Notes, the Kalamalka Notes and the Offering
  Debentures.”

3 

	14. 	
      Section 7(a) of each of the Promissory Notes is hereby
      amended by and restated in its entirety to read as
  follows:

	
      “use the funds advanced under the Loan for any purpose
      other than the financing of inventory and receivables, except as otherwise
      contemplated by the business plan delivered to the Agent pursuant to
      Section 6(l)(v);” 

	15. 	
      Section 7(c) of each of the Promissory Notes is hereby
      amended by deleting the word “or” at the end of subsection (iv), inserting
      the word “or” at the end of subsection (v) and adding the following as a
      new subsection (vi) at the end thereof:

	
      “discounted bills of exchange, discounting or factoring
      of receivables or other similar arrangements, in each case incurred in the
      ordinary course of business;” 

	16. 	
      Section 7(d) of each of the Promissory Notes is hereby
      amended by and restated in its entirety to read as
  follows:

	
      “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 factoring of
      accounts receivable and sales of inventory, materials and equipment in the
      ordinary course of business, or not otherwise contemplated by the business
      plan delivered to the Agent pursuant to Section 6(l)(v);”
  

	17. 	
      Section 7(e) of each of the Promissory Notes is hereby
      amended by adding the following sentence at the beginning of the
      subsection:

	“other than with respect to the repayment or prepayment of
      any indebtedness incurred in connection with the Offering,”.

	18. 	
      Section 10 of each of the Promissory Notes is hereby is
      amended by replacing “fifty cents (USD$0.50)” with “twenty-five cents
      (USD$0.25)”.

	 	 
	19. 	
      Cancellation and Replacement of Existing Warrants.
      Immediately following the execution of this Amendment, Darroch (on behalf
      of itself and the Darroch Designees) shall have a one-time right to cancel
      all, but not less than all, of the Class D Warrants issued to Darroch and
      the Darroch Designees, and, in turn, receive (on behalf of itself and the
      Darroch Designees) New Warrants exercisable for a number of shares of
      Common Stock equal to the number shares of Common Stock for which such
      Class D Warrants are exercisable as of the date that is immediately prior
      to the date on which such right is exercised. Darroch may exercise the
      foregoing right upon NBGI receiving a written notice of Darroch’s election
      to do so within five (5) business days of the Amendment Date, in which
      case Darroch shall, and shall cause the Darroch Designees to, cooperate
      with NBGI to execute and deliver to NBGI any documents or agreements that
      are necessary to allow NBGI to cancel the Class D Warrants prior to or
      concurrently with the Offering and issue the New Warrants, in each case,
      in accordance with applicable law .

4 

	20. 	
      Payment of Outstanding Interest. All Interest (if
      any) under the Promissory Notes accrued and unpaid prior to the Amendment
      Date (the “Outstanding Interest”) shall be paid by the Borrowers on
      the earlier of June 15, 2014 and the Closing by wire transfer in
      immediately funds to the Agent’s Account (the “Payment Date”).
      Within ten (10) business days of the Amendment Date, NBGI shall prepare
      and submit to the Agent a statement (the “Estimated Statement”) of
      the Outstanding Interest. The Agent and NBGI shall cooperate and endeavor
      to resolve any disputes regarding the calculation of the Outstanding
      Interest; provided, however, that if the Agent and NBGI are not able to
      reach mutual agreement on or prior to the Payment Period, the Estimated
      Statement provided by NBGI shall be final and binding on all the parties
      hereto for purposes of determining the Outstanding Interest.

	 	 
	21. 	
      Issuance of New Warrants. The Borrowers shall
      issue the New Warrants to the Lenders prior to or concurrently with the
      Offering. The New Warrants shall be granted piggyback registration rights
      on any subsequent registration statement filed with the Securities and
      Exchange Commission (the “SEC”), including, without limitation, the
      registration statement that may be required to be filed with the SEC in
      connection with the Offering. The Lenders shall cooperate with the
      Borrowers to execute and deliver to the Borrowers any documents or
      agreements that are necessary to allow the Borrowers to issue the New
      Warrants to the Lenders in accordance with applicable law.

	 	 
	22. 	
      No Other Modification. The Promissory Notes shall
      not be modified by this Amendment in any respect except as expressly set
      forth herein.

	 	 
	23. 	
      Governing Law. This Amendment and all matters
      arising hereunder will be governed by the laws of British
  Columbia.

	 	 
	24. 	
      Counterparts. This Amendment may be executed and
      delivered (including by facsimile and other electronic transmission) in
      one or more counterparts, and by different parties hereto in separate
      counterparts, each of which shall be deemed to be an original, but all of
      which taken together shall constitute one and the same
agreement.

	 	 
	25. 	
      Entire Agreement. This Amendment, together with
      each of the Promissory Notes, constitutes the entire understanding of the
      parties hereto with respect to its subject matter and may not be modified
      or amended, except in writing by such parties.

[Signature Pages Follow]

5 

 

 

 

 

 

ANNEX I 

	Lender 	Address 
	DARROCH INVESTMENTS LTD. 	576 Middleton Way, Coldstream BC V1B 3W8
  
	DAVID LUND 	355 Grey Road, Kelowna BC V1X 1W9 
	JOHN NELSON 	968 Ryder Drive, Kelowna BC V1Y 7T5 
	DAVID WILLIS 	250 Dormie Place, Vernon, BC V1H 1Y5Naked Brand Group Inc.: Exhibit 10.9 - Filed by newsfilecorp.com

	CONFIDENTIAL 	EXECUTION VERSION 

AMENDMENT TO PROMISSORY NOTE 

THIS AMENDMENT (this “Amendment”) is dated
April 4, 2014 (the “Amendment Date”) 

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 

	  
	(together, the “Borrowers”)

AND: 

	Each of the persons listed on Annex I
      to this Amendment under the heading “Lender” 
	  
	(each, a “ Lender” and collectively, the
      “Lenders” or the “Kalamalka Lenders”)

WHEREAS: 

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

	 	 
	B. 	
      The Borrowers have issued certain secured convertible
      promissory notes (the “Promissory Notes” or the “Kalamalka
      Notes”; capitalized terms used but not otherwise defined herein shall
      have the meanings ascribed to them in the Promissory Notes) in the
      aggregate principal sum of $200,000 (the “Indebtedness”) to the
      Lenders in connection with that certain Agency and Interlender Agreement,
      dated as of November 14, 2013, among the Borrowers, Kalamalka Partners
      Ltd., as agent (the “Agent”), and each of the Lenders; and NBGI has
      issued to the Agent and the Lenders certain warrants to purchase shares of
      common stock of NBGI (“Common Stock”).

	 	 
	C. 	
      Naked requires additional funds to expand its inventory
      and sales operations, and, in order to raise funds for that purpose, NBGI
      desires to issue certain secured convertible promissory notes (the
      “Bridge Notes”) to a group of accredited investors (as defined in
      applicable U.S. federal securities legislation) (the “Bridge
      Investors”) in connection with an agency and interlender agreement to
      be dated as of even date herewith (the “Bridge Financing
      Transaction”).

	 	 
	D. 	
      Following the issuance of the Bridge Notes, NBGI intends
      to complete a round of equity financing through a private placement (the
      “Offering”) of certain secured convertible debentures (the
      “Offering Debentures”).

	 	 
	E. 	
      In connection with the Bridge Financing Transaction, the
      Borrowers desire to amend each of the Promissory Notes; and, as an
      inducement of the Lenders willingness to enter into this Amendment, NBGI
      shall issue to the Agent and the Lenders collectively three warrants per
      $1 of Indebtedness to purchase 600,000 shares of Common Stock in the
      aggregate at an exercise price equal to $0.15 and a term of five years
      from the initial closing date of the Offering (the “Closing”) and
      on such other terms as shall be described in the Offering Debentures (such
      warrants, the “New Warrants”).

NOW THEREFORE THE PARTIES HERETO AGREE as follows: 

	1. 	
      Section 1 of each of the Promissory Notes is hereby
      amended by replacing “January 31, 2014” in the first sentence with
      “October 1, 2016” and replacing the entire second sentence with the
      following:

	
      “This Note will bear interest (the “Interest”) on
      the Principal outstanding, from time to time, both before and after
      maturity, default and judgment, commencing on (i) the date of advance of
      the Principal to the Borrowers and through the date prior to the Amendment
      Date at the rate of twelve percent (12%) per annum and (ii) the Amendment
      Date and until repaid to the Lender at the rate of six percent (6%) per
      annum, in each of clause (i) and (ii), such Interest calculated daily and
      payable quarterly. For Interest with respect to any period on or after the
      Amendment Date, the Borrowers shall wire the Interest payable for each
      quarter to the Agent’s Account (as defined below) no later than the last
      business day of that quarter. As a courtesy, the Agent may prepare a
      statement of Interest owing for each quarter and provide same to the
      Borrower prior to quarter-end. Notwithstanding the foregoing, the
      Borrowers are responsible for ensuring that the correct amount of Interest
      is paid each quarter. 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. 	
      Section 2 of each of the Promissory Notes is hereby
      amended by replacing the entire first sentence with the
  following:

	
      “On the Due Date, the Borrowers shall wire to a bank
      account maintained by the Agent (the “Agent’s Account”) an amount
      equal to the Principal and any outstanding Interest, plus any other
      amounts owing under the Loan.” 

	3. 	
      Section 3(a) of each of the Promissory Notes is hereby
      amended and restated in its entirety to read as
follows:

	
      “if the Borrowers shall fail to pay any portion of the
      Principal, any Interest on this Note or any other sum due hereunder (or
      under any other Kalamalka Note or any Bridge Note or Offering Debenture),
      on the date on which such amount shall become due and payable, whether at
      the stated Due Date or at any accelerated date of maturity or at any other
      date fixed for payment;” 

	4. 	
      Section 3(b) of each of the Promissory Notes is hereby
      amended and restated in its entirety to read as
follows:

	“if the Borrowers shall fail to perform in any material
      respect any of the other covenants and agreements set forth (i) herein (or
      in any other Kalamalka Note) 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”), or (ii) in any Bridge Note or Offering Debenture,
      or in any security granted by either of the Borrowers in connection with
      their obligations under any Bridge Note or Offering Debenture, and in each
      case of (i) and (ii) not cure such failure within ten (10) days after
      notice thereof;” 

2 

	5. 	
      Section 3(e) of each of the Promissory Notes is hereby
      amended by replacing “CAD$50,000” with “USD$200,000”.

	 	 
	6. 	
      Section 3(h) of each of the Promissory Notes is hereby
      amended by replacing “CAD$25,000” with “USD$25,000”.

	 	 
	7. 	
      Section 3(j) of each of the Promissory Notes is hereby
      amended by and restated in its entirety to read as
  follows:

	
      “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 common shares of a Borrower, in a single
      transaction or a series of related transactions, except (i) 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 (ii) in
      connection with a merger, consolidation, reorganization, restructuring or
      other similar transaction of entities controlled by, controlling or under
      common control with any of the Borrowers; and”

	8. 	
      Section 6 of each of the Promissory Notes is hereby
      amended by adding “and Section 6(m)” after “Section 6(b)” in the first
      sentence of the first paragraph.

	 	 
	9. 	
      Section 6(e) of each of the Promissory Notes is hereby
      deleted in its entirety.

	 	 
	10. 	
      Section 6(f) of each of the Promissory Notes is hereby
      amended by replacing the entire second sentence with the
  following:

	
      “It shall provide the Agent, at Agent’s sole cost and
      expense, 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;”

	11. 	
      Sections 6(l)(vi), (vii) and (viii) of each of the
      Promissory Notes are hereby amended by replacing “three (3)” with “ten
      (10)”.

3 

	12. 	
      Section 6(l)(ix) of each of the Promissory Notes is
      hereby amended by replacing “weekly” with “quarterly”.

	 	 
	13. 	
      Section 6(l)(x) of each of the Promissory Notes is hereby
      deleted in its entirety.

	 	 
	14. 	
      Section 6(m) of each of the Promissory Notes is hereby
      deleted in its entirety and replaced to read as
follows:

	
      “make any repayment or prepayment in respect of any
      amounts outstanding under the Bridge Notes or the Offering Debentures
      prior to the Due Date, unless such repayment or prepayment is made to each
      of the Bridge Investors, the Kalamalka Lenders and all the holders of the
      Offering Debentures (each, a “Holder”) on a pro-rata basis as
      determined, with respect to each such Holder, by the percentage of (i) the
      amount of such Holder’s then outstanding principal loan and accrued and
      unpaid interest under the Bridge Note, the Kalamalka Note or the Offering
      Debenture, as applicable, in relation to (ii) the total amount of the then
      outstanding principal loans and accrued and unpaid interest under the
      Bridge Notes, the Kalamalka Notes and the Offering Debentures.”
  

	15. 	
      Section 7(a) of each of the Promissory Notes is hereby
      amended by and restated in its entirety to read as
  follows:

	
      “use the funds advanced under the Loan for any purpose
      other than the financing of inventory and receivables, except as otherwise
      contemplated by the business plan delivered to the Agent pursuant to
      Section 6(l)(v);” 

	16. 	
      Section 7(c) of each of the Promissory Notes is hereby
      amended by deleting the word “or” at the end of subsection (xi) or (xii),
      as applicable, inserting the word “or” at the end of subsection (xii) or
      (xiii), as applicable, and adding the following as a new subsection (xiii)
      or (xiv), as applicable, at the end thereof:

	
      “discounted bills of exchange, discounting or factoring
      of receivables or other similar arrangements, in each case incurred in the
      ordinary course of business;” 

	17. 	
      Section 7(d) of each of the Promissory Notes is hereby
      amended by and restated in its entirety to read as
  follows:

	
      “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 factoring of
      accounts receivable and sales of inventory, materials and equipment in the
      ordinary course of business, or not otherwise contemplated by the business
      plan delivered to the Agent pursuant to Section 6(l)(v);”
  

	18. 	
      Section 7(e) of each of the Promissory Notes is hereby
      amended by adding the following sentence at the beginning of the
      subsection:

4 

	
      “other than with respect to the repayment or prepayment
      of any indebtedness incurred in connection with the Offering,”. 

	19. 	
      Payment of Outstanding Interest. All Interest (if
      any) under the Promissory Notes accrued and unpaid prior to the Amendment
      Date (the “Outstanding Interest”) shall be paid by the Borrowers on
      the earlier of June 15, 2014 and the Closing by wire transfer in
      immediately funds to the Agent’s Account (the “Payment Date”).
      Within ten (10) business days of the Amendment Date, NBGI shall prepare
      and submit to the Agent a statement (the “Estimated Statement”) of
      the Outstanding Interest. The Agent and NBGI shall cooperate and endeavor
      to resolve any disputes regarding the calculation of the Outstanding
      Interest; provided, however, that if the Agent and NBGI are not able to
      reach mutual agreement on or prior to the Payment Period, the Estimated
      Statement provided by NBGI shall be final and binding on all the parties
      hereto for purposes of determining the Outstanding Interest.

	 	 
	20. 	
      Issuance of New Warrants. The Borrowers shall
      issue the New Warrants to the Lenders prior to or concurrently with the
      Offering. The New Warrants shall be granted piggyback registration rights
      on any subsequent registration statement filed with the Securities and
      Exchange Commission (the “SEC”), including, without limitation, the
      registration statement that may be required to be filed with the SEC in
      connection with the Offering. The Lenders shall cooperate with the
      Borrowers to execute and deliver to the Borrowers any documents or
      agreements that are necessary to allow the Borrowers to issue the New
      Warrants to the Lenders in accordance with applicable law.

	 	 
	21. 	
      No Other Modification. The Promissory Notes shall
      not be modified by this Amendment in any respect except as expressly set
      forth herein.

	 	 
	22. 	
      Governing Law. This Amendment and all matters
      arising hereunder will be governed by the laws of British
  Columbia.

	 	 
	23. 	
      Counterparts. This Amendment may be executed and
      delivered (including by facsimile and other electronic transmission) in
      one or more counterparts, and by different parties hereto in separate
      counterparts, each of which shall be deemed to be an original, but all of
      which taken together shall constitute one and the same
agreement.

	 	 
	24. 	
      Entire Agreement. This Amendment, together with
      each of the Promissory Notes, constitutes the entire understanding of the
      parties hereto with respect to its subject matter and may not be modified
      or amended, except in writing by such parties.

[Signature Pages Follow]

5 

 

 

 

 

 

 

ANNEX I 

	Lender 	Address 
	BAUMANN INVESTMENTS LTD. 	PO Box 90, Falun, AB T0C 1H0 
	GREGORY DARROCH 	576 Middleton Way, Coldstream, BC V1B 3W8
  
	GERALD EDWARDS 	648 Dougherty Avenue, Kelowna, BC V1W 5B1
  
	JOHN NELSON 	968 Ryder Drive, Kelowna, BC V1Y 7T5 
	SHAWN EDWARDS 	3770 Mission Springs Drive, Kelowna, BC V1W
      3M1

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